With every sixth person moving into a city in the world being a citizen of India, the real estate and construction sector there is expected to be the third largest, globally, by 2030, a report by KPMG claims.
Up to 12 million people are "urbanising" every year in India, a rate surpassed only by China. It means the country will need a sustained building spree that would see more than 75 million people employed in construction by 2022.
As it races to build 110 million extra homes needed, plus necessary transport infrastructure, by 2025 the size of India’s construction market would reach $1 trillion, the third largest in the world, according to KPMG.
This rapid urbanisation coupled with a host of other factors have made India the fastest growing large economy in the world in 2015, surpassing China– Neeraj Bansal, KPMG
The firm expects India to have 77 cities with more than 1 million people by 2030, the biggest being Delhi (pictured) with 36 million.
The rapid growth of a young urban population at an unprecedented scale could both drive and transform the Indian economy, if managed well. But in order to meet the urbanisation challenge and reap the economic benefits, deep reforms are needed in India’s bureaucratic processes, funding and skills development, says the report, which KPMG compiled with India’s National Real Estate Development Council (NAREDCO).
"The world is witnessing urbanisation at an unprecedented pace, which is expected to further accelerate, and India is anticipated to lead this growth," wrote KPMG’s sector head in India, Neeraj Bansal.
"This rapid urbanisation coupled with a host of other factors such as favourable demographics, policy reforms undertaken and sound macro-economic fundamentals, have made India the fastest growing large economy in the world in 2015, surpassing China."
Investors should take note, the report says. Up to $1 trillion will be needed to upgrade Indian infrastructure between now and 2013, while India’s own home-building targets will require $2 trillion by 2022.
Image: Streetscapes in Delhi, India. (Francisco Anzola/Wikimedia Commons)
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To capitalize on this pent up demand, the land and cost of construction needs to be affordable.
We may improve the supply of land and FAR through amateurish master plans that has become pretty abstract paintings, not a functional document to rely upon.
We may earmark areas for urban renewal without having understanding of neighborhood dynamics and supply potential TDR for generation and use.
We are using TP Scheme derivatives to either expand the city fringe or develop greenfield urban node/ TOD or a new city to get cheaper land , liable to appropriation for future speculation.
What we need and that takes time for capacity building ( even Aladdin d jinn would be helpless and bound to fail) is professionals to conceive the projects, construction crew , trained by a guild to work in a construction process that requires skill and would appreciate skilled workers and professionals.
These are the above condition precedent to be met immediately otherwise today’s dream will definitely become tomorrow’s frustration.
The overall plan should be such that the risks involved are shared by stakeholders /participants such that they are capable of handling them or have the capacity and legislative/executive powers to resolve them . Front runners in this regard are Land acquisition and environmental clearances. They can only be handled by the Govt and its agencies in view of large number of landowners and the local politics involved in the acquisition of land.Presently, huge number of infrastructure and highway projects specially the linear projects are either not commenced or are held up.