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POLICY REVIEW
Table 2 shows an estimate of India’s Construction and The C&H sector has strong
the training capacity of such Housing industry had grown linkages with various
skilling institutions imparting in the past at a Compounded industries such as cement,
vocational training in the Annual Growth Rate (CAGR) steel, chemicals, paints, tiles,
country. It clearly shows the of about 11.1% on the back fixtures, and fittings. While
inadequacy of conventional of massive infrastructure in the short term it serves as
institutions, which cover investment and rapid rise a demand booster, in the long
only one-tenth of working in housing demand (NSDC term it contributes towards
age population. The scenario 2012); it was expected to grow boosting the infrastructure
would not have changed at the same rate subsequently capacity (NSDC 2012). As a
as there has not been much and even at an exceeding rate result, the C&H sector has a
addition of such training since after 2020 and in the high employment elasticity of
institutions. near future. The size of the 1.12 (RBI 2015).
C&H industry is estimated
2. Construction and to rise from US$650 billion 2.2 Growth drivers
Housing Sector – Size, in 2023 to US$ 1 trillion in Construction sector can be
Trends and Growth 2030 driven by huge housing broadly classified into two
Drivers gaps in the cities and large segments: (i) Real Estate (ii)
2.1 Size and Importance backlogs in infrastructure Infrastructure. Real Estate
development (RICS – KF segment has been rapidly
Construction and Housing 2023). Construction and growing and, in terms of its
(C&H) sector constitutes an Housing is the second largest contribution to the GDP, it
important economic activity economic activity in terms of is expected to rise from the
that drives the growth of employment after agriculture current about 7-7.5 per cent
emerging economies like by providing employment to to 13-15 per cent by 2030. The
India, which are in the process about 71 million people. market size of the Indian real
of achieving economic estate sector was estimated
growth, infrastructure It is held that Construction to be around US $ 120 billion
development and capital and Housing (C&H) in 2017 that grew to US$ 180
formation (both physical and investment accounts for billion in 2020 (RICS KF 2023).
financial). Construction sector around 52.4% of the Gross Real estate sector has been
contributes to 10.5 per cent of Fixed Capital Formation growing at a CAGR of 12%
the gross economic output and in India. Large amount of and is expected to become
its Housing (or, Real estate) Foreign Direct Investment market size of US $ 1 trillion
counterpart contributes (FDI) s flow into the sector, in 2030. The real estate sector
to about 7.3 percent. Table which were estimated at constitutes of Residential,
3 shows the trends and US$ 36 billion during 2012- Commercial and Special
projections of the output 22 (NSDC 2012), which Economic Zones (SEZs) and
of both these sectors and continue to rise after liberal real estate activities. All these
their share in total economic norms for capital remittance. sub-segments are witnessing
output. The combined Investments in Construction a rapid growth due to rapid
economic output share of and housing have a positive economic growth.
these sector is estimated domino effect on the
to increase from current 18 supplier industries, thereby Rapid urbanisation and
per cent to 21 percent by contributing immensely rising income levels lead
2029-2030 (RICS – KF 2023). to economic development. to a high demand for real
October, 2024, Volume 25. No.1 - SHELTER 41
