Page 40 - September 2015 Digital Construction Opportunities

INFRATRACK Home booster The success of the Indian government’s “Housing for all” programme will be largely incumbent on the emphasis it places on development of urban structure and negotiating funding challenges. Te Housing for All (HFA) project will inputs to the construction sector, such as subvention to households at 6.5 per cent give the Indian economy a much needed cement, iron and steel, will also grow. Te for loans up to a 15-year tenor through boost. However, its success will depend growth of other sectors will depend on two nodal agencies – Housing and Urban on the ramping up of the existing urban the strength of the forward and backward Development Corporation Limited and infrastructure, fast tracking of approval linkages of the construction sector with National Housing Bank. processes and also targeting the actual the rest of the economy. As the output of Ergo, the government will have to fnd more benefciary, is the verdict of agency India sectors supplying inputs to the construction resources to fnance this, so as to adhere to Rating and Research. sector increases, it will increase the demand its fscal defcit target. Te direct beneft of HFA to the economy is for goods and services in the economy due Te rating agency expects the demand for estimated to be `15 trillion in a seven-year to higher income generation. Te economic cement for the scheme alone to be closer to timeframe (FY16-FY22). However funding impact of the scheme will also be felt at the FY15 production levels and steel demand to of the investment of `15 trillion through state level. Te biggest benefciary of this will be higher than the production levels of bars public-private partnerships and ramping up be Uttar Pradesh, followed by Maharashtra and rods. Local bodies will face challenges in the supply of raw materials for construction and West Bengal. Tese are the top three supplying piped water, sewerage, sanitation namely steel and cement are big challenges states in terms of housing shortages and and municipal solid waste management. for the execution of the HFA scheme. increased construction activities will help Also, the present quality of municipal Municipal services such as supplying piped these states’ economies to grow. services is far from satisfactory. Tis will water, sewerage, sanitation and municipal Te scheme to provide 20 million houses lead to a wide gap between demand and solid waste management are also far from in three phases over FY16-FY22 has supply, when we compare the current levels being equipped to take on a project of this a central grant component (`100,000 of supply with the current demand plus the magnitude in the next seven years. per slum household) going to the state additional demand from this scheme. An Apart from providing impetus to the government, and central assistay nce increase in capacity may lead to redundancy construction sector, the scheme will increase (`150,000 other households) is likely post this project and the reliance on employment opportunities and help grow to go directly to households. Also, the imported materials will push up their cost the services sector. Sectors supplying crucial central government will provide interest to that extent. u 40 construction opportunities|sEPTEMBER 2015