The construction industry is the second largest industry of the country after agriculture. It makes a significant contribution to the national economy and provides employment to large number of people. The use of various new technologies and deployment of project management strategies has made it possible to undertake projects of mega scale. Recent experiences of several new mega-projects are clear indicators that the industry is poised for a bright future. India is now on the verge of witnessing a sustained growth in infrastructure build up. The construction industry has been witness to a strong growth wave powered by large spends on housing, road, ports, water supply, rail transport and airport development. While the construction sector’s growth has fallen as compared to the pre-2008 period, it has picked up in the recent past. Its share as a percentage of GDP has increased considerably as compared to the last decade. Construction sector accounts for nearly 45% of the total investment in infrastructure and is expected to be the prime beneficiary of the surge in infrastructure investment in the near to medium term. The importance that the Government of India places on bridging the country’s acute infrastructure deficit is evident from the two fold increase in the planned outlay for the infrastructure sector in the 12th Five Year Plan. Significant infrastructure investments, along with revival in industrial capex and improvement in real estate scenario, are likely to catalyse growth for construction companies in India, going forward. The construction sector, however, continues to face challenges from land acquisition issues, adverse political and structural changes, shortage of talent, design and constructability issues, and rising material and labour costs. Further, deficiencies in project planning, use of inappropriate procurement contracts and faulty contract management also contribute to delays in project implementation. The financial impact of delays on construction companies is worsened by the absence of an efficient arbitration mechanism. In addition, the flow of funds to the sector is constrained by sectoral caps/exposure norms, asset-liability mismatches, and the absence of an active corporate bond market.
The Department is headed by Mr. Bodhisattwa Mukherjee.