Spending in construction sector gets 30% hike

Country's construction industry's spending is set to increase by over 30% as the annual budget has also proposed a new Development Finance Institution (DFI) with a starting capital of approximately US$2.7 billion and will be used for large-scale infrastructure projects. The Indian government also announced another 19,500km of road and highway construction projects to be awarded by March 2022, aiming to build road connectivity and boost the economy. With the government focusing on infrastructure to drive economic growth, the construction industry is expected to rebound by 14.5% in 2021, according to Global Data. Apart from the planned federal capital expenditure, the government has also committed to provide US$27 billion to the states and autonomous bodies for capital expenditure in their respective areas. Reflecting how seriously the government wants to give the economy a jump start to recover from the Covid-19 crisis, capital expenditure will be at a decade-high of 15.9% of the overall budget. Another important initiative is the launch of a national ̳Asset Monetization Pipeline', which will monetize the assets and boost financing for the infrastructural segment through the sale of toll roads, oil and gas pipelines and power transmission lines. Dhananjay Sharma, construction analyst at Global Data, informed that as a result of the planned capital expenditure, the construction industry is expected to help the economy come out from the Covid-19-induced slowdown and lead India onto a new growth trajectory and facilitate the government's goal of turning India into a US$5 trillion economy.