ACE January 2020

Cover Story
Construction 2020:
Looking ahead with
optimism
The construction
sector in India has
had its ups and
downs and the
road ahead needs
to be threaded
with caution and
discipline
Construction is one of largest employer in India after
agriculture. An array of industries such as cement,
steel, brick, timber and building material make up the
construction sector and as we step into the new year key
concerns remain, concerns about how the sector is poised
and how will it perform in the existing business climate.
Market realities
The construction sector encompasses a lot of ancillary
industries and to sustain the momentum of growth in the
sector, the individual issues of these industries need to be
looked at too.
“It is true that there has been a slow down, in fact the Indian
construction sector alone can’t be blamed since the whole
world is facing a slowdown, it is a recession of sorts. In
comparison to the previous year there has been a slowdown
worth 30-40 per cent,” says Manikandan Mahalingam,
General Director, Paschal Formwork (India) Private Limited,
one of the leading formwork suppliers in India “The sector is
in need of a cash flow and that remains a big concern, so if
the cash flow is structured and the infrastructure projects are
executed timely, there is no reason the Indian construction
should not rebound and witness a gradual and steady growth
in 2020-21.”
Rakesh Modi, Chairman, Mtandt Group, a pioneer in bringing
aerial work platform, mobile access platforms and fixed fall
protection in the Indian markets says “Government also
needs to support manufacturing by incentivising the exports
and providing the infrastructure on rent. Today If I want to
put up a factory 50 per cent of my investment goes up in
buying the land and setting up the manufacturing facility
and associated infrastructure. Should I prefer to invest this
money on acquiring the raw material or any other factor
I feel is of importance, there is no way out. In China and
other developed nations the government makes production
facilities available to entrepreneurs on rent, one can just go
and start production. A similar program in India will go a long
way in encouraging potential entrepreneurs too.”
Maintaining the momentum of growth
According to Nejeeb Khan, Head Design and Business
Strategy in India, Katerra “In the past, government initiatives
such as 100 smart cities, world-class highways, and shipping
infrastructure, housing, and urban development have
attracted significant investments through FDI, private
players, and government budgets. As per the economic
survey 2017-18, India will require US $4.5 trillion by 2040
for the development of infrastructure. Thus, looking forward
to 2020 and beyond, we believe the construction sector will
find itself at the center of rapid economic and social change,
which is already transforming the built environment.”
Residential and commercial construction and infrastructure
projects like roads, railways, airports and ports are some of
the key areas which have been under the government’s radar.
In fact during December 2018, as a report by IBEF points out,
the infrastructure sector witnessed PE/VC twelve deals worth
500 million and eight `6,989 crore (US$ 1 billion) plus deals.
10 January 2020 ACE UPDATE
ARCHITECTURE CONSTRUCTION ENGINEERING