A recent joint report by Knight Frank and The Royal Institution of Chartered Surveyors (RICS) predicts a meteoric rise in India's construction sector, forecasting an output of $1 trillion by 2030. The expansion is expected to generate 100 million jobs, showcasing India's impressive economic resilience. The growth is driven by rising incomes, increasing domestic demand, and an evolving business landscape. Additionally, supportive government policies and substantial Foreign Direct Investment (FDI) are further bolstering this booming sector, emphasizing India's rapid infrastructural and real estate development.
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In a recent study on India's booming construction sector, esteemed property consultants Knight Frank, in collaboration with The Royal Institution of Chartered Surveyors (RICS), project an impressive real estate output of $1 trillion by 2030. This growth, marking a notable shift in the Indian economy, signifies the potential creation of 100 million jobs within the next seven years.
India's robust economic resilience, even amidst global downturns due to events like the 2000 dot-com bust, the 2008 Global Financial Crisis, and the recent COVID-19 pandemic, sets it apart. With a present GDP estimated at USD 3.4 trillion, India ranks as the fifth-largest economy worldwide.
Factors fuelling India's economic acceleration include rising income levels, bolstering domestic demand, and an ever-evolving business landscape. Both domestic and foreign investors find the environment increasingly attractive, thus feeding the growth.
The upswing in economic growth bolsters the construction sector, which encompasses real estate and infrastructure development tailored to the expanding needs of the economy. By 2030, forecasts peg India's economy at a whopping USD 7 trillion, thereby necessitating substantial growth in the construction and real estate sectors.
In the past decade, India's construction output, accounting for infrastructure, real estate services, and dwelling ownership, has experienced a Compound Annual Growth Rate (CAGR) of 11%. This sector alone contributes a sizable 18% to the national economic output. Furthermore, the construction domain stands as the country's second-largest employment creator, underlining its significant economic ties. Recent data reveals the construction sector's employment elasticity to its output stands at 1.124.
By 2030, projections for India's real estate sector predict a surge from the current USD 650 billion to USD 1 trillion. Predominantly driven by residential demands, other factors include commercial, retail, hospitality, and warehousing developments, all in response to India's burgeoning population.
Over the past decade, India has witnessed the launch of approximately 2.8 million residential units across its major cities, equivalent to a staggering 3.1 billion sq ft of residential development. The nation also boasts of 880 million sq ft of premier office space and 106 million sq ft of retail real estate. Furthermore, business sentiments and apt policy adaptations over recent years have amplified both domestic and international investments in India's construction sector. A clear testament is the cumulative Foreign Direct Investment (FDI) of USD 35 billion from 2012-22.
Emphasizing the importance of sustainable infrastructure, the Indian central government has escalated its budgetary allocations for infrastructure needs like roads, railways, ports, and telecommunications. The government's capital expenditure for infrastructure surged from 1.7% of GDP in 2012-13 to an anticipated 2.5% in 2023-24. Visionary policy initiatives, including the National Infrastructure Pipeline (NIP) of 2020 and the 2022 Bharatmala, aim to streamline infrastructure development nationwide.
In conclusion, India's construction and real estate sectors are on an unprecedented growth trajectory. Driven by a combination of robust domestic demand, favourable policies, and strategic investments, the nation is set to achieve remarkable milestones in the coming decade.
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