Infrastructure & Construction
SPENDING 10% of gross GDP CONTRIBUTION TO GDP 24% TOTAL JOBS 36 million (approx.) CHALLENGES
There is a distinct slowdown in some sections of the infrastructure sector. While areas like power, bridges, dams, roads and urban infrastructure development have shown an increase in the order books, the severest slowdown has been observed in the thermal energy sector.
There are several processrelated delays contributing to the slowdown in this sector— for instance, land acquisition delays, slow pre-tendering process.
On average, construction and infrastructural projects have suffered from time and cost overruns in the 2025 per cent range. In some cases, that goes up to 50 per cent. Other problems relate to weak dispute resolution processes and inefficient performance management.
Slow progress on the Public-Private partnership model.
There has been a substantial increase in the order books of companies that are working in certain sectors, including railways, roads, electricity transmission and distribution, urban infrastructure and irrigation.
Over the last couple of years, mid-cap construction companies have seen their order books grow 2.5 times their turnover.
WHAT NEEDS TO BE DONE
The government chose the right strategy—pushing public expenditure in 2015-16. But that alone cannot fill the shortfall of private investment. Public-private partnerships should be encouraged.
The finance minister had announced an institution— 3P India—with an allocation of Rs 500 crore to help in mainstreaming publicprivate partnerships. The Kelkar committee has also made its recommendations on revisiting and revitalising the PPP model.
There is no fear of automation displacing jobs, but recovery could take three to five quarters—capacity utilisation has to go up from the current 60-65 per cent.
Vinayak Chatterjee Chairman, Feedback Infra