Spurred by the supporting economy and favourable policy initiatives by the current government, the rejuvenated real estate and infrastructure sector bodes well for the construction business, especially as the government will provide an extra capex push in view of the upcoming general elections in 2024.
Vinod Behl


The resilient and continuously improving economy and businesses in a stable government, the long-pause in interest rates amidst easing inflation, and the investment-friendly policies, have given a big push to the real estate and infrastructure construction sectors.

the rejuvenated real estate and infrastructure sector

Real estate, especially residential, has been on a high growth curve with apartment sales touching a 15-year high. Going forward with a favourable economic, business and employment scenario, likely cut in interest rates, and rising demand with strong urge for home ownership, will see the residential realty gaining further momentum in 2024, driven by both end-users and investors.

The office sector that held ground amidst global headwinds, with 42.2 msf of leasing in the first three quarters of 2023, will see greater momentum with the growth of flexible workspaces and the E&M sector, supported by government's favourable manufacturing policy and initiatives to take advantage of global supply chain realignment.

India will remain a preferred market for business expansion with the supply of Grade A office spaces at comparatively lower rates and global GCCs expanding their operations in India. India’s real estate has become a preferred asset class for global investors, especially institutional investors. And with the current government expected to return to power in 2024, the stability of the reform-oriented government will prove to be a growth booster for real estate.

The big rise in government spending on infrastructure development is spelling good times for the construction sector. Under FY 24, the budget capital investment outlay for infrastructure development is being increased by 33% to 10 lakh crore (USD 122 billion) - about 3 times the outlay in FY 20. Further, it is complemented with 1 year extension to 50-year interest free loan to states to spur investment in infrastructure with a significantly enhanced outlay of USD 16 billion. The large spending on infrastructure is already showing its positive impact on the construction order book of corporations. According to industry statistics, the total order book of top 25 companies in infrastructure, power, and capital goods, rose 16.1% to 11.47 trillion by September 30, 2023, compared to 9.88 trillion during the same period a year ago.

the rejuvenated real estate and infrastructure sector

In 2024, mega infra connectivity projects in the pipeline include expansion of Delhi Airport Terminal 1 by end of February; operationalization of Navi Mumbai Airport; and completion of the first phase of Jewar International Airport towards the end of 2024. According to CRISIL, India will spend nearly Rs 143 lakh crores on infrastructure development between FY 2024-2030, more than twice the Rs 67-lakh crores spent in FY 2017-2023. Of the total, Rs 36.6 lakh crore will be green investments, making a 5x rise compared with 2017-2023. Four key sectors of roads and highways, power transmission, renewable energy and ports will benefit while upcoming sectors like EVs, solar, wind, hydrogen energy will pick up pace. There will be significant growth in the average ticket size of projects and funding needs will be met through accelerated bond market, robust equity markets, and greater foreign investment.

According to global rating agency Fitch, investors are bullish on a stable government and the reforms. A 25% YoY increase in budget allocation towards the road sector, has already fuelled interest among investors. In FY 24, road construction will beat FY 23 targets by a good margin. NHAI is revising the target to construct 6000 km of roads and awarding 13500-13800 km of contracts in the current financial year. Funds from Canada will continue to support NHAI's monetization programme and remain invested in National Highway Infra Trust (NHIT).

NHAI needs Rs 13,000 cr of investment to monetize 1000 km length of about a dozen highway stretches through NHIT. KKR, Cube, IRB have put in two bids each for two bundles of highways which NHAI plans to monetize through (TOT) model. About 10 global and domestic infra bonds, including KKR are in the race for National Investment & Infrastructure Fund (NIIF) USD 1.2 billion road portfolio. Multilateral global funding agencies are showing faith in India's growth potential. In a latest move, the Asian Development Bank has committed USD 400 million to create high quality urban infrastructure, enabling cities to mobilise innovative financing such as commercial borrowings, issuance of municipal bonds, sub-sovereign debts and PPPs to boost urban infra investments.

The flagship Gati Shakti programme of infrastructure development is playing a crucial role in boosting construction sector. The programme has evaluated and put on fast track more than 300 central and state projects worth Rs 11.58 lakh crore during two years of its inception. And now the government plans to take PM Gati Shakti National Master Plan (PMGS-NMP) global to help developing and developed nations like Sri Lanka, Nepal, Bangladesh, Central Asian and South Asian countries to streamline their infrastructure planning processes through a digital tool.

There are good times ahead for construction companies as prices of steel and aluminium have dropped by 25% and 32%, respectively, though there has been increase in cement prices. In the wake of approaching general elections, the Modi government is pushing for speedy completion of real estate/housing and infrastructure projects. Under the NIP (National Investment Pipeline), projects worth Rs 108 trillion are currently at different stages of implementation.

The budget for FY 25 will have greater allocation for infrastructure which in turn will boost construction sector. Like real estate sector, we will be seeing greater consolidation in the construction sector. According to construction industry analysts, stronger companies like PNC Infra, NCC, KNR Construction, Dilip Buildcon see promising opportunities. Especially diversified construction companies are performing better. According to India Brand Equity Foundation (IBEF) , the construction market is likely to reach USD 1.42 trillion by 2027, expanding at a CAGR of 17.26% during the 2022-2027 period. To achieve economic growth target of USD 5 trillion by 2025, the government is giving a big push to real estate and infrastructure sector.
Building a New India - By Fortifying the Construction Industry
In the backdrop of India's current dynamism and ambitious goals in infrastructure development, the book sheds light on the nation's journey. The construction industry's share, constituting 13% of the global GDP, is a crucial aspect

Read more ...

Realty Year-Ender: A Year of Residential & Retail Resurgence
Riding high on the positive policies, and notwithstanding global headwinds, India’s resilient real estate made a mark with its impressive performance. While the residential segment saw robust demand, supply, and sales, and was on

Read more ...

Colliers leads AI revolution in construction with remote monitoring tool CoGence
Real estate advisor, Colliers, has been carving a niche in the tech space with its AI-enabled platform CoGence. Designed to detect anomalies at construction sites and generate a high precision quality report, the tool is widely being applied at several of the

Read more ...

Cement volumes to expand by 9-10% in FY 2024 despite moderation in growth in H2: operating margins to improve by 260-310 bps to 16.0-16.5%: ICRA
ICRA expects cement volumes to rise by a healthy 9-10% in FY2024 supported by demand from infrastructure and urban housing sectors. In H1 FY2024, the volumes increased by 11-12% YoY. Nevertheless, the below normal monsoons could impact the

Read more ...

Polls Perk Up Realty & Infra Projects And Vice Versa
The ruling government is pushing speedier completion of real estate, housing, and infrastructure projects to win the confidence of voters in the upcoming elections in five states and the General elections in 2024. In turn, the polls are providing a renewed

Read more ...

Critical Considerations for Effectively Digitalizing the Engineering & Construction Industry
The Engineering & Construction (E&C) industry has typically lagged behind its peers in adopting cutting-edge technology. However, E&C companies have now begun to witness the humungous benefits that digitalization can reap. From increased productivity

Read more ...

IMEC:  A Big Booster for India’s Infra Construction Sector
The 8000 km multimodal transport corridor known as the India Middle-East Europe Corridor (IMEC) initiated at the recent G20 Conclave in New Delhi, is set to open up a multi-billion dollar opportunity for the growth of India’s infrastructure and construction companies

Read more ...

Considerations for Site Selection for Engineering Plant Projects
Site selection is the first and most important factor for location of any Engineering Plant Project as they involve huge construction costs. An unsuitable or wrong project site can result in great loss and may also lead to delays or failure of the project. Anil Kumar Nanda

Read more ...

Construction Mishaps - A Question Mark on Quality & Safety
Zainab Faridi compiles a series of recent construction mishaps that not only underscore the perils faced by Indian construction workers but also expose the urgent need for stricter quality check parameters, a skilled workforce, accountable project management

Read more ...

Decarbonizing Construction Industry for a Greener Future
A recent report by Deliotte - Shell indicates that the construction sector accounts for 37% of global CO2 emissions, of which 16% represent embodied carbon, that is carbon dioxide coming from material sourcing and manufacturing, logistics, and construction

Read more ...

Policy Prescription for Circular Economy to Boost Infra Construction
At a time when India is pushing policy reforms in a big way to provide a major boost to its economy, the generation of colossal 9.46 million tons of plastic waste every year and 150 metric tons of construction waste annually (about 40% of the global

Read more ...

7 Years of RERA Of Promising Gains, Challenges & Pitfalls
After seven years of its journey, the landmark reform of RERA (Real Estate Regulatory Act) has made some remarkable gains in terms of regulating the sector and protecting the interests of homebuyers. Especially considering that two crucial years were

Read more ...

National Ropeway Development Programme to Boost Real Estate
A massive USD 15 billion National Ropeway Development Programme of the Central Government, currently underway, will provide a major aerial connectivity boost to real estate, especially in Tier 2-3 cities that have high tourism potential. A Rs 1.25 lakh crore

Read more ...

J&K Realty and Infrastructure Development on Fast Track
As Jammu & Kashmir prepares to host G-20 Tourism Meet in Srinagar from 22-24 May 2023, the strides made by the Union Territory on urban development (in a run up to this conclave following the abrogation of Article 370 in August 2019), will provide

Read more ...

Ashoka Buildcon Achieves Largest Continuous Concrete Pour for Building Project
Ashoka Buildcon Limited has several prestigious projects under its belt and has to its credit notable record-breaking achievements - the latest being casting of a raft with 12400 cubic meters of concrete. With this feat, the company is eager to get

Read more ...

Investment Bonanza in UP to Fast-Track - Real Estate & Infrastructure Development
Riding high on landmark reforms and performance-driven governance, Uttar Pradesh has received a record investment proposals of over 33.50 trillion from Indian and foreign investors at the recently organised 3-day Global Investor Summit (GIS) in Lucknow

Read more ...

Mega Projects: Redefining Geographies
Mega infrastructure projects like flyovers, elevated roads, highways, metros, bridges, tunnels, expressways, etc, are redefining how we interact with our surroundings; in fact, Infrastructure is intrinsically linked to everyday life and is a defining

Read more ...

Major Connectivity Projects to Transform Urban Development Landscape of Delhi-NCR
With some state elections and general elections in sight, the Modi government has pulled out all stops to put its mega infrastructure projects on fast track for the socio-economic upliftment of people. A number of such key infrastructure projects

Read more ...

Women in Construction - Diverse Perspectives Will Drive Progress
India’s construction industry is advancing and embracing new technologies, and thereby throwing up exciting opportunities for women to grow professionally in traditionally male-dominated roles. With the advent of robotics, digital twins, and remote

Read more ...