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Sudhanshu Ranade

Chennai , March 9

IN 2002-03 the construction sector, with a total value of about Rs 70,000 crore, accounted for only about 5.3 per cent of GDP. This share has remained roughly constant over the past decade, with construction having grown only as fast as GDP.

In real terms, construction increased about 71 per cent between 1993 and 2003. Now with the sector thrown open for 100 per cent foreign direct investment (FDI), it is expected to grow much faster, pulling up the rate of growth of the GDP with it, though, given the weight of construction in GDP, one cannot expect too much of a pull effect.

It is because of this that in his Budget speech, Mr P. Chidambaram, confined himself to noting that construction was expected to create `lakhs of jobs', as against about 7 million new jobs expected to be created by the information and technology industry over the next four to five years, and 12 million jobs expected to be created in the textile sector as it is helped to respond more proactively to the opportunities created by the abolition of textile and garment export quotas to the US and EU, whose imports touched $70 billion and $85 billion, respectively in 2001-02, with about $10 billion in each market coming from South Asia, as against a total of $23 million from China.

On the other side, the new jobs in construction under the FDI dispensation will be biased in favour of more skilled, and more highly paid jobs.

Already construction in metropolitan centres and in large towns pays more than Rs 100 per day for the services of unskilled labour.

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