Challenges in Construction Industry in India – 2018


In today’s time, Construction Industry is one of the major industries because it not only serves as the second largest GDP provider to Indian government but also provides employment to around 16 percent of the nation’s working population. The Indian construction industry employs over 35 million people and creates assets worth over 200 billion.

The Construction industry of India is an important indicator of the development as it creates investment opportunities across various related sectors. The sector is labour-intensive and, including indirect jobs, provides employment to more than 35 million people.

Also looking at how it shapes the future for the Nation, the real estate and construction sector in India is expected to be the third largest globally by 2030, contributing over 15 percent to the country’s GDP. (Published in a joined report by KPMG and real estate body NAREDCO).

The Construction industry in India expects a growth rate of 7-8% per annum over the next 10 years.

The Construction Industry also is a significant driver of FDI (Foreign direct investment) inflows.

However, there are major challenges faced in the construction industry.

Understanding what are the various sectors and jobs that come under the Construction Industry:

Construction is the process of constructing a building or infrastructure. Construction starts with planning, design, and financing; it continues until the project is built and ready for use.

Large-scale construction requires collaboration across multiple disciplines. A project manager normally manages the job, and a construction manager, design engineer, construction engineer or architect supervises it.

Then, comes the actual construction work for which workmen are hired. Depending on the complexity of the work, the budget, and the hours they work, workmen are provided salary.

For negotiating the collective agreements in the construction industry, the labour relations system defines four specific sectors.

1. Industrial sector

The industrial sector includes the construction of buildings, including facilities and equipment physically attached to these buildings or not, used mainly for an economic activity involving exploitation of mineral resources, the transformation of raw materials, and production of goods. 

2. Institutional and commercial sector

The institutional and commercial sector includes the construction of buildings, including facilities and equipment physically attached to these buildings or not, used mainly for institutional and commercial purposes, as well as all structures that cannot be included in the residential, industrial, and civil engineering and roads sectors.

3. Civil engineering and roads sector

The civil engineering and roads sector includes construction of works of general interest for public or private use, including facilities, equipment, and buildings physically attached to these works or not, notably the construction of roads, aqueducts, sewers, bridges, dams, electricity lines, and natural-gas pipelines.

4. Residential sector

The residential sector includes the construction of buildings, including facilities and equipment physically attached to these buildings or not, in which more than 85% of the area, excluding parking spaces, is used for habitation.

a. Heavy residential sector

The new construction of any building in the residential sector has more than 4 floors above ground level, seen from at least one side of the building and excluding parking spaces, also including the modification, renovation, maintenance and repair of existing buildings having more than 6 floors.

b. Light residential sector

The construction of any building in the residential sector that does not fall under the heavy residential construction category.

Various challenges in Construction Industry :

1. Lack of skilled labour

As the growth rate of the Construction Industry is increasing tremendously, on the other hand, there seems to be a shortage in the number of workmen. 

It is difficult to find an adequate/sufficient number of skilled workmen for tasks that involve a high amount of risk. 

Especially the shortage is more in the Civil Engineering and Road construction sectors. 

Even though skilled workmen happen to like their work, they cannot afford to put their lives at risks and putting their families lives at stake.


2. Poor Safety of the Workmen 

The major reason for the decrease in the number of workmen is because safety in such environments is at stake. 

Workmen these days are reluctant to work in such hazardous conditions because there are no proper safety measures taken and also they aren’t provided with safety kits which are actually necessary for such kind of environments.

Workmen in Construction Industry are exposed to hazardous environments which is dangerous and at such sites, where chances of occurrence of man-made & natural calamity are high, safety should be the first priority. However sadly, the condition is worse than expected.

Workmen aren’t even provided with basic necessities in some cases because of the shortage of funds.  

They deserve to be paid better but end up receiving very less amount for the kind of hard work they do and the time they invest.


3. No organized management of funds.

There is no proper management of funds. 

At some places, funds are distributed in a very biased fashion leaving the deserving members of the team being paid lesser amount and the majority of funds being distributed among higher authorities. 

These kinds of issues need to be handled with care as it may lead to the downfall of the company in future because, if the working class members are not happy with what they are being offered they prefer to walk away and join a better place where they are paid the deserving amount.

Therefore, it’s necessary to have proper management of funds to ensure the company’s bright future.


4. Poor Planning methodologies 

Even before the construction process, actually starts there needs to a proper plan that the whole team needs to understand, agree on and follow the same in the planned period.

Even though we have advanced in technology, we still need to use our intellect to develop a smart planning methodology that can save the company from incurring losses and design it in such a way that there are measures ready beforehand in case of an unexpected or a sudden mishap. 

Even a small mistake in the planning phase can cause huge loss after it is implemented.

 So, it becomes necessary to have proper planning and be equipped with a plan B if in case of plan A fails.

Also, as we know weather these days can be unpredictable proper measures need to be implemented beforehand.


5. Automation replacing workmen.

With the growth of technology many sectors, especially the commercial and industrial sectors of the construction industry, have moved on to use automated machines, which has ended up replacing workmen.

Even though automation helps to fasten the process it also has few drawbacks and manual supervision seems to be required in some places.

In addition, large companies prefer automation since they have a larger budget in comparison to small companies, and for them, automation can help complete project before time.

Talking about small-scale industries, they are still dependent on workmen for their completion of projects, so it is a good thing as it can sustain the employment for worker class.


6.  Mismanagement leading to Project Delays 

Day by day, as the technology is progressing, so is the complexity increasing. When a complex project is being executed, there is a fine line between maintaining the budget and at the same time seeing to it that, the project is completed on time. 

Even though we have advanced technologies, we fail to understand what we lack and fail to preserve what we have. 

The most tricky yet an important factor is the management of the whole process of the construction process, right from gathering information to planning to execute all of the phases in a successful manner.

Therefore, management forms the backbone of the whole construction process. Co-operation, attitude to grow and learn, adaptability, sustainability are the key factors that lead to the success of a project.

Completing the project on time is not a big deal but building the right project, the right way is most important!

In addition, the team needs to review and fix all the loopholes that can lead to failure of the project. Communication is the key because if all the members communicate and share their ideas the chances of failure due to mismanagement will reduce.

Therefore, if the project is handled properly considering various factors and the management is done in an efficient way, the result would be appealing.


7. Threat to environment 

The construction industry produces 25-40% of world’s carbon emission.

New project management process should be cultivated where the focus is more on reducing energy emissions and see to it that lesser waste is let out into the environment. 

The construction industry needs to incur new methodologies and management criteria to reduce consumption of water and other resources in a minimal amount and help preserve and save the environment.

The best example is that recently a new technology has evolved where the gasses released from a car, other vehicles are collected, and those emissions are used to create paints.  

Similarly, technology advancements need to be done in the construction sector where these kinds of hazardous gasses are collected and used for some purpose.



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