The construction industry occupies the second most important place in the Indian economic and industrial sector. The contribution of the sector to the country’s GDP is almost 9%, employing over 51 million people. With the recent lockdown and several restrictions imposed due to the COVID-19 pandemic, the Indian construction industry has been impacted to a great extent. Analysts and research firms are predicting steady growth in the year 2021 and beyond, yet multiple challenges are hovering in the construction sector in India. In this article, we will discuss the top issues and challenges facing the construction industry in India.
An influx in Material Costs
The cost of raw materials is on the rise. The main reason being a shortage in the supply of materials to the sector due to a disruptive supply chain. Besides, to stabilize the economy, reforms are being introduced by Central as well as the state governments. Additional cess on taxes is being introduced, spurring up the cost of the raw materials. The result is high expenses leading to a high-value evaluation of the real estate constructions. Consequently, buyers are less attracted to invest in the construction sector. The mitigation path can be, adopting automated and modern technologies to increase customer satisfaction.
Safety Of The Employees
Safety and security are now a growing concern worldwide. Employees and the construction sites need to be Covid free, preventing any spread of infections. Adequate safety measures must be adopted within the building premises. Deploying a huge number of employees or construction workers may lead to unprecedented infection spreads; harming the progress of the projects and unnecessary delays. On the flip side, a lesser number of employees impacts the deadlines and timelines severely.
Reduced Investment In The Real Estate Sector
The impact of the pandemic has severely crippled the Indian economy. There have been several job losses and a reduction in wages. Consumers of the real estate sector are hesitant to invest in construction projects. The number of buyers has reduced considerably. Besides the need for commercial buildings has lessened due to the “work from home” policies enforced by the majority of the companies and firms. With the situations in the future being bleak and uncertain, there is no clarity on how long the recession will continue.
A mandatory aspect of any construction project is to ensure the preservation of the surrounding environment. In India, it is tough to maintain soil erosion and degradation. The reason being mainly floods, droughts, soil alkalinity, aridity, and salinity. Besides air and water pollution levels are still not within controllable limits in the country. Urbanization in major cities has decreased the soil quality, impacting the environment. The builders and real estate owners are forced to adopt innovative measures and invest more in reducing the negative effect on the environment.
Provision Of Electricity
With more and more real estate firms coming up in India, the necessity for the continuous provision of electricity is increasing at a rapid pace. Property owners and builders sometimes struggle in obtaining clearance faster from the authorities. They are forced many a time to create captive power units within the apartment complexes. Such provisions may turn out to be expensive and involvement of skilled laborers. Besides, it increases the completion time of the projects.
Effect Of Natural Disasters
Natural disasters and hazards are unpredictable and uncertain in the climatic conditions of India. Hence site selection is an important factor in construction projects. Even if sites are in close proximity of raw materials the fact that they are located on a flood prone or earthquake prone areas, reduces the chances of being shortlisted for construction. Moreover, buildings need to be planned, designed, and constructed in such a manner enabling tolerance of natural disasters. Cumulatively this increases the expenses and costs of the constructions.
The availability of skilled manpower at different stages of construction is sometimes a concern. Especially during pandemic situations, the crisis rises leading to delay in the proposed deadline of the projects. Besides lack of training provided to the construction workers further hampers the timeline and quality of the constructions. Focused attention is needed to speed up the skills and knowledge level of the workers.
Need Of Multiple Clearances
The completion of any construction demands multiple clearances from various designated authorities. Electricity, pollution control, environment preservation, land, services, and utilization, etc. are the various areas where clearances are mandatory. Even if the builders complete the construction work within the planned timeframe yet delay in obtaining the clearances may need to delay in handing over the projects to the buyers.
The above challenges have been impacting the progress of the construction industry in India. The need of the hour is to mitigate the challenges by introducing modernization and scaling up the labor force.