The $126 billion Indian construction sector industry is the country’s second-largest employer and ranks third in terms of impact on the economy. The sector has the potential to be the country’s largest employer by 2022, increase its GDP contribution to over 15 percent and emerge as the third-largest construction market globally by 2030.

There are quite a few opportunities that contribute to that potential. The government’s ambitious 100 Smart Cities mission and the Housing for All program to create 20 million social housing units by 2022 can provide a catalyst for growth for an industry coping with an extended slowdown. In the latest Union Budget, the government has increased allocations for affordable housing and given its infrastructure status, moves that are expected to increase developer interest in this area. Growth in this segment is now expected to outpace that of the overall real estate industry even as the demand for affordable housing keeps rising to touch 38 million by 2030.  A recent report from consulting major PwC and NAREDCO, the country’s apex real estate body, and APREA, an Asia Pacific real estate association estimates an investment of $1 trillion over the next 5-7 years to meet India’s infrastructure development needs priorities, including housing, smart cities and other infrastructure segments such as transportation and industrial corridors.

There are two key factors that will be critical to achieving productivity and quality goals as India embarks on a large-scale capital-intensive infrastructure development plan – talent and technology.

The construction sector is the second largest employer after agriculture and directly or indirectly creates more than 45 million jobs. Interestingly, as the country’s economy shifts away from agriculture, there is a significant flow of labor from agriculture to construction. The industry is highly unorganized as a labor market and employs a lot of short-duration seasonal migrants. In fact, the industry employs just over 36 percent of the estimated 15.2 million short-duration out-migrants. And 80 percent of the workforce in the construction industry is minimally skilled.

A 24-sector study conducted by the National Skill Development Corporation (NSDC) found that the building, construction, and real estate sector would have the maximum incremental human resource requirement by 2022. The labor demand of around 76.5 million would make the sector the second largest employer in India but with the additional challenge of ensuring the workforce has the requisite technical skills and abilities for the ambitious mandate.

The talent shortage is a significant challenge that has to be addressed by the government as well as the industry. Lack of a skilled workforce could significantly affect the cost, quality, and productivity of capital-intensive projects. The NSDC study observed that the existing education and training infrastructure and schemes would be unable to address the huge demand for a skilled workforce.

Subsequently, the Construction Industry Development Council (CIDC), an industry association formed under the initiative of the Planning Commission, is working with several states for the training and certification of construction workers. Additionally, there is also a proposal to create a dedicated Construction Skill Development Fund (CSDF) for human resource development in the construction sector. The proposal envisions a co-funded public-private initiative that could facilitate the training of 200,000 workers every year.

Technology has become a core component of the development process in the global construction industry. And one of the most transformative technologies in the sector over the last decade has been BIM (Building Information Modeling) applications. Though BIM adoption in India is still much lower than in other developed markets, it could be the key to efficiency, productivity, and quality given the sheer volume of construction activity on the agenda.

A 2014 study on BIM in India noted that it was still in an experimentation phase in terms of maturity and level of implementation. The study found that only 22 percent of the study’s respondents had deployed BIM, 27 percent were actively considering it but 43 percent had no definite implementation plans.

Globally, governments are playing an active role in encouraging and accelerating BIM adoption in their construction markets. The UK, for instance, has defined a BIM strategy that would drive the reduction of capital costs and carbon burden in the construction and operation of the built environment. Similarly, the governing body for building control in Singapore formulated a BIM Roadmap in order to drive BIM adoption and improve productivity and integration across various disciplines.

India needs a similar model to drive the systematic adoption of BIM across the sector. According to the BIM study mentioned earlier, several industry leaders were in agreement about the need for a National BIM Taskforce to define and coordinate a strategy for more widespread BIM adoption.

Technologies like BIM, wearable devices, AR/VR, and autonomous vehicles are redefining traditional approaches in the construction industry to the planning, design, implementation, and maintenance of large-scale construction projects. Concepts like Big Data and IoT are transforming the way the industry defines and manages efficiency, productivity, quality, and safety. The Indian construction sector will also have to fundamentally rethink its approach to business as it is entrusted with the mandate to transform the country’s built-up environment. A technically skilled workforce enabled by the latest technologies will play a central role in the success of that transformation.


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