Construction is an important aspect of human existence and economic growth.
With a market size of around US$639 billion in 2023, and this is anticipated to register a compound annual growth rate (CAGR) of over 6% in the foreseeable future, India’s construction market is the fourth-largest in the world after the United States, China and Japan. It is expected to become the third-largest valued at US$1.4 trillion by 2025. The global construction market size reached US$13.57 trillion in 2023 and is projected to grow at a CAGR of 6.5% between 2024 and 2032, reaching a value of around US$23.92 trillion by 2032.
Contributing 9% of the country’s GDP, the construction industry employs the highest number of workers after the agriculture and household sectors. It employed over 70 million people last year, and this is expected to increase to 100 million by 2030.
The industry has been playing a vital role in India’s pursuit of all-inclusive development since independence. For instance, the overall length of the road network has grown from 0.399 million kilometres in 1951 to over 6.3 million km, transporting more than 60% of goods and 85% of passengers throughout the country.
India increased its electricity generation capacity from 1,362 megawatts in 1947 to over 440 gigawatts now, becoming Asia's third-largest electricity generator, lighting up almost all its villages from just 3,061 in 1950. The same could be said of railways, irrigation projects, gas and oil pipelines, airports, ports, communications network, housing, hospitals, hotels, water supply, waste and water treatment facilities, etc. The construction industry contributed to the success of all these sectors covering 250 sub-sectors.
It is also a major beneficiary of India’s spectacular growth story. And this story hasn’t even reached the halfway mark if one considers the government’s resolve to accelerate its efforts to bridge the infrastructure deficit and continuously upgrade existing infrastructure to bring it at par with global standards. By 2030, cities are expected to generate 70% of India’s GDP. By 2036, according to the World Bank, 600 million people will be living in the cities, representing about 40% of the country’s total population and demanding 25 million additional mid-end and affordable dwelling units. By the end of 2025, real estate demand across major cities is expected to increase by 15-18 million square feet. The warehousing stock is expected to reach nearly 500 million sq ft in the top eight tier-1 cities.
India currently has the fifth-largest metro network in the world and will soon overtake advanced economies such as Japan and South Korea to become the third-largest network. The metro rail network has reached 810 km in 20 cities, and a network of 980 km and the Regional Rapid Transit System (RRTS) is currently under construction in 27 cities. Schemes announced by the government, such as the 100 Smart Cities Mission, 35 Multimodal Logistics Parks, 12 industrial corridors, and 190-200 functioning airports by 2040, will create their own momentum for the construction industry. The National Infrastructure Pipeline includes 9,142 projects covering 34 sub-sectors and projects worth over US$1.3 trillion, which are at different stages of implementation.
Learning from the ancients
When one looks at the ruins of Dhola Vira in Gujarat or the mound hiding layers of settlements in Rakhigarhi in Haryana, one marvels at the engineering skills and sophisticated construction techniques of the ancestors who lived more than 5,000 years ago. When one sees the amazing construction of the Qutub Minar, the ancient temples at Khajuraho, the Taj Mahal, the Golconda fort, or the Murud Janjira, one is left wondering at the proficiency of the people who designed these structures between a thousand and five hundred years ago, at the flawless execution of these magnificent structures at a time when none of the modern technology or systems existed.
What is truly amazing and inspiring is that the traditional science of architecture and buildings in India, Vastushashtra, was sensitive to energy flow patterns, particularly of light and wind, and took into account the five sacred elements – earth, wind, water, fire and space. These construction activities, intimately connected to nature and the local environment, promoted harmonious living in the same way that natural creatures build artistic nests or underground habitats. Engineering and construction are perhaps natural instincts that have helped us meet our basic need for shelter and contributed immensely to economic progress. Man is a builder by instinct.
In modern times, however, this ancient occupation and human capability is seen as an industry associated with endless, often avaricious, exploitation of natural resources that has caused incalculable damage to environment and depletion of natural wealth.
By far the most significant challenges the construction sector faces arise from climate change and the damage the industry causes to the environment. Whether it is the extraction of earth, sand, and stones, or the construction methodologies, or the compromise with environmental regulations, or the disposal of solid wastes, the construction industry must carry an enormous blame for environmental degradation and an extraordinary onus of complying with good environment management practices.
The addition of billions of square metres of space under different schemes and programmes will increase the demand for natural and virgin building materials that will require more mining and generate huge quantities of waste. The draft National Resource Efficiency Policy report of 2019 states that India has already increased its material consumption six times, from 1.18 billion tonnes in 1970 to 7 billion tonnes in 2015. India’s resource extraction rate stands at 1,580 tonnes per acre compared to the world average of 450 tonnes per acre. While India imports many critical raw materials such as sand, it has a much lower recycling rate of 20-25% compared to 70% in the developed countries of Europe.
Data from micro-action plans uploaded on the portal of Central Pollution Control Board shows that only 35 of the 131 non-attainment cities (those that have not met the National Ambient Air Quality Standards) have provided statistics on construction and demolition (C&D) waste generation. Together, these cities have generated 6,563.48 tonnes of C&D waste per day but the collection efficiency is less than 10%. It is not clear how much of this is processed and recycled. There are tonnes of C&D waste in the cities, and the amount is gro wing exponentially. Gurgaon with its 800,000 tonnes of legacy waste is a perfect example, according to the State of India’s Environment 2024 Report produced by the Centre for Science & Environment (CSE).
At present, the construction sector accounts for more than 39% of energy-related carbon emissions in the country. Globally, the buildings sector contributes approximately 37% of energy-related CO2 emissions. More than 34% of the global energy demand is attributed to constructing, heating, cooling, and lighting homes and businesses. The Intergovernmental Panel on Climate Change suggests that efficiency policies in buildings can cut GHG emissions by up to 90% in developed countries and up to 80% in developing countries. Implementation of such policies can help lift up to 2.8 billion people in developing nations out of energy poverty.
In view of the projected population increase by 2050, urban India is expected to build 700-900 million square metres of residential and commercial spaces, according to the Long-Term Low-Carbon Development Strategy developed by the Ministry of Environment, Forest and Climate Change. This will require a range of measures, particularly the use of green building materials, the adoption of sustainable construction practices, energy-efficient power and lighting, ventilation and air-conditioning systems, thereby paving the way for the efficient realization of its sustainability targets.
This also calls for greater adoption of new technologies, such as Building Information Modelling (BIM), 3D printing and prefabricated technology, project management information systems, data analytic, decarbonization practices, and off-site manufacturing to enhance the efficiency and quality of work, reduce costs, improve the speed of construction, and hopefully reduce the carbon footprint.
Responsible practices
With over 300,000 housing units erected annually, and an eightfold increase in cooling demand between 2017 and 2037, there has to be major emphasis on balancing the need for thermal comfort while reducing active cooling demand. This calls for improving energy efficiency to reduce energy consumption and associated greenhouse gas emissions.
It will be necessary to ensure greater voluntary compliance and strict adherence to mandatory standards such as Eco-Niwas Samhita (ENS), an Energy Conservation Building Code for Residential Buildings (ECBC-R) launched by the Ministry of Power to promote energy efficiency in the design and construction of homes, apartments, and townships. The ENS introduced the Residential Envelope Transmittance Value (RETV), which measures heat transfer through a building's envelope (walls, roof, and windows). Similarly, the Energy Conservation Building Code (ECBC) initiated by the Bureau of Energy Efficiency (BEE) aims to achieve energy savings of 25 to 50% in compliant commercial buildings with a significant connected load.
The Energy Conservation (Amendment) Act of 2022 provides for the transitioning of ECBC into the Energy Conservation and Sustainability Building Code by incorporating measures relating to embedded carbon, net-zero emissions, materials and resource efficiency, deployment of clean energy, and circularity. It also makes ENS mandatory. Besides, BEE Star Rating for Buildings, MNRE’s Green Rating for Integrated Habitat Assessment (GRIHA), and CII’s Indian Green Building Council (IGBC) are unique tools developed to assess the status of energy efficiency in buildings.
The construction industry will have to reimagine construction practices and integrate into construction projects smart building systems, artificial intelligence, 3D Printing and the Internet of Things, and deploy intelligent HVAC systems in order to optimize energy consumption while ensuring occupant comfort. Perhaps, it can also learn from the instinctive wisdom contained in some of our traditional eco-friendly construction practices.
While there can be no compromise on safety and quality standards, the concern for environment has to be embedded in professional ethics. We can overlook this only at huge societal cost and personal discomfort, both physical and moral. Construction is an industry that shapes communities. Ethical practices are not just a business necessity but a societal responsibility. This applies as much to clients as to contractors. Construction is a connect between heritage and our future, a link between our history and our aspirations. Stephen Gardiner said: “Good buildings come from good people, and all problems are solved by good design” and, if one may add, good intentions.
Ashok Lavasa is a former finance secretary of India and vice-president of private sector and public-private partnership at the Asian Development Bank.
