It is evident that this will have a snowball effect on the construction sector. There would be additional capex activity by the private sector for ramping up manufacturing facilities for the key construction materials, including the solar cells and panels, for which the capital goods would now be tax exempt. Subsequently, demand for OEMs for these upcoming facilities will surge, which may cause their capacities getting crunched.
With the 500 GW renewable power target by 2030, a slew of renewable projects is already underway, and more are being announced. Aggressive targets for their commissioning would be expected, which would call for an expediting overhaul for pre-construction/development activities with Government’s support. This is particularly relevant for pump storage, hydro, wind and other renewable projects that necessitate large chunk of land.
Additionally, the construction sector in India is already reeling under severe labor shortage. Surplus capex will further auger this dire requirement, and the labor gap on major projects may widen even more. However, with construction activities spreading in the nooks and corners of our country, skilling of rural population would take priority with new local institutes and vocational training centers.
The climate change impact from construction projects will amplify, and this may spur the movement for a green construction economy in the long run. Fueling this, sector specific decarbonization roadmaps would be expected. The two carbon devils of construction – cement and steel would start witnessing more investments and innovation in low carbon alternates. But this will be a long haul, and the carbon emissions would intensify on immediate basis, calling for the much-needed public reforms for controlling embodied emissions in the country.
