SOIL Report 2011 - ACCESS Development Services

Private Industry and Services—What Is ‘India Inc’ Delivering in Employment to the Poor? 115Infrastructure construction consists of:construction for transportation (roads,bridges, ports, airports); power sector infrastructure;telecoms infrastructure and irrigationand urban services. Infrastructureconstruction has witnessed a rapid increasein public spending, doubling and treblingwith each Plan period for power andtransportation, respectively, with overallinfrastructure spends raised by 2.5 per centover the 11th Five Year Plan period, to hit8.37 per cent of GDP in 2012. However, inspite of the provisions made, spending onpower and roads has lagged behind target in2010–11, with the road sector particularlyhampered by land acquisition problems.Trends include: reduction in manual sitetime and the role of less skilled labour, dueto modularized components, and increasedinvestment in solar energy (an increase of 61per cent in Budget 2011–12).Building and real estate grew at a CAGRof 12 per cent between 2002 and 2008. It isdominated by residential building and realestate which makes up 82 per cent of the totalbusiness, with a current demand of nearly5 million for new housing. The balanceis made up of commercial building andreal estate at 9 per cent and developmentof SEZs also at 9 per cent. Commercialdemand is growing rapidly in Tier II and IIIcities, driven by growth in organized retailand affordable land prices. The sector isstill muted after the severe impact of globalrecession, and the much hyped demand forresidential properties has taken longer thanexpected to translate into actual purchases.Trends include: reduction in the role of lessskilled labour and manual site time; entryof specialized facilities management servicesfor infrastructure support—security,plumbing, gas pipe, TV cable, electricalservices and building maintenance.The construction materials sector isbroadly divided into cement, steel and constructionequipment segments. 6 Between6Other less significant segments include paints,aluminum, glass, plastics and timber segments.2002 and 2008, these three segments grewat 8.3 per cent, 7.8 per cent and 20 per centCAGR, respectively. In spite of a constructionboom, India’s per capita cement andsteel consumption still remains below globalaverage, at 0.15 t and 0.04 t, respectively. 7Steel production is heavily concentratedin Eastern India. Construction equipmentconsists of equipment for mixingand transporting concrete, earth-movingequipment, drilling and tunnelling equipment,road construction equipment andmaterial handling equipment. Trends include:increasing automation of the manufacturingprocesses, consolidation of cementand steel sectors and outsourcing of supportfunctions such as transport, storage, packagingand so on.The leather and leather goods sector grew ata CAGR of 11.9 per cent between 2002 and2008. 8 It divides into finished leather andleather products, and continues to be dominatedby exports (70 per cent of the totalsize). The products sector is dominated byfootwear, and also garments, harnesses andsaddler. This sector is set to increase its sharein exports with a small shift from finishedleather to leather goods, even though thedemand for finished leather continues tobe dominant, and it will employ nearly halfof the incremental workers by 2022. Theleather industry faces a special manpowerchallenge due to its unattractiveness and thestigma attached to working in it.The furniture sector grew at a CAGR of17 per cent between 2002 and 2008, dividinginto household (65 per cent total), and officeand contract manufacturing (for hotels andrestaurants) segments. Exports, at 30 percent annually, are insignificant but growingrapidly. Domestic sales are fuelled by thereal estate and the organized retail boom.The sector remains dominated by wood7Per capita cement consumption is 0.4 t globallyand 0.83 t in China, while per capita steel consumptionis 180 kg globally and 320 kg for China.8This is the figure for leather exports, which is70 per cent of the total sector.