Construction Sector

High Budgetary allocation for infrastructure:

  • In UnionBudget2021, the government has given a massive push to the infrastructure sector by allocating Rs.233,083 crore (US$32.02billion) to enhance the transport infrastructure

  • The government expanded the ‘National Infrastructure Pipeline (NIP)’ to 7,400 projects ~217projects worth Rs.1.10 lakh crore (US $15.09 billion) was completed as of 2020

Increasing private sector involvement:

  • Private sector is emerging as a key player across various infrastructure segments, ranging from roads and communications to power and airports

  • Private investment in to physical and social infrastructure is key to putting India in a high growth trajectory, which will make it a US$5trillion economy by2024-25

  • Yearly private equity (PE) and venture capital (VC) investment in India is expected to surpass US $65 billion in 2025

Improvement in logistics:

  • In 2020, India's $215 billion logistics business will be one of the world's largest, with a CAGR of 10.5 percent

  • In the 2021 Agility Emerging Markets Logistics Index, India was rated second

Rising foreign direct investment (FDI) in the sector:

  • Between April 2000 and March 2021, FDI in the construction development (townships, housing, built-up infrastructure, and construction development projects) and construction (infrastructure) activity sectors totaled US $26.08 billion and US $24.72 billion, respectively

Submitted by

Kailash Mulchandani

IIM, Kashipur

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