India to be 3rd largest construction market globally by 2030: Report

The real estate and construction sector in India is expected to be the third largest globally by 2030, contributing over 15 per cent to the country’s GDP, a joint report by KPMG and real estate body NAREDCO has said.

“The sector is expected to become the largest employer in India by 2022, providing employment opportunities to over 75 million people,” the report said.

India’s urban population is expected to increase by about 40 per cent from 420 million in 2015 to over 580 million by 2030. According to the paper, nearly 110 million houses would be required by 2022 alone in urban as well as rural India to provide housing to all citizens. This includes the current shortage of over 60 million houses, out of which around 20 million exist in urban areas.

Neeraj Bansal, Partner and Head, Building, Construction and Real Estate Sector – KPMG in India, said, “The recent policy reforms such as the Real Estate Act, GST, REITs, steps to reduce approval delays etc. are going to strengthen the sector. The sector players need to develop a global mindset towards quality, project delivery, work culture and governance. Strong steps are required to provide faster approvals, serviceable and clear title of land, long term finance and skilled workforce.”

According to the report, there are a number of infrastructure projects in the pipeline — 432 projects worth ₹6.5 trillion for roads, more than 400 projects worth ₹6 trillion in railways, 70 projects worth ₹670 billion for the development of airports and 75 projects worth ₹551 billion for the ports sector.

The report also highlights challenges such as land-related issues with limited funding from banks, limited availability of long-term funding, lack of manpower coupled with the conventional usage of technology followed by the lack of stable and predictive tax regime.