In 2021, the Indian construction industry grew by 17.1 percent, owing to the continuous loosening of limitations and increased construction activity in the road and highways sector. Increased government investment in the transportation, health, energy, and housing infrastructure sectors under the Budget for 2022/2023, which will encourage new public-private partnerships to create large-scale projects in these sectors, will help the industry grow by 5.8% in 2022.
The Ministry of Road Transport and Highways of India (MoRTH) stated in December 2021 that it would invest INR7 trillion ($92.4 billion) in infrastructure projects over the following 2-3 years. The government's goal to dramatically boost the stock of affordable housing units for low- and middle-income cohorts under the 'Housing for All' programme by 2022 will also help the industry develop.
Despite the fact that the Budget for 2022/2023 will provide significant support to the building industry, rising construction prices, delays in land acquisition and tenders, and supply chain restrictions may stymie construction progress in the short to medium term. Due to the present crisis in Ukraine, construction material costs are likely to grow even further, with rising energy costs affecting the energy-intensive manufacture of cement, bricks, and concrete.
The construction industry is predicted to increase at a 6.2 percent annual rate between 2023 and 2026, thanks to investment under the Pradhan Mantri Gati Shakti Master Plan. Between fiscal years 2020 and 2025, the industry will benefit from INR111 trillion ($1.5 trillion) in investment through the National Infrastructure Pipeline (NIP) (April 2019 to March 2025).
The government created the National Monetisation Pipeline (NMP) in August 2021 to raise more funding for infrastructure development. From FY2021/2022 to FY2024/2025, the strategy focuses on obtaining funds from the private sector by leasing out state-owned infrastructure assets and investing the proceeds in new infrastructure projects.
The government's intention to complete 23 new highway and expressway projects by FY2024/2025, with an anticipated investment of INR3.3 trillion ($46 billion), will also assist forecast-period growth.
In addition, between 2015 and 2035, the government aims to invest INR5.8 trillion ($82 billion) in port infrastructure and modernization projects as part of the Sagar Mala project.