BJP-led construction work helping the industry regain from its downfall

Attempting to turnaround the fall in construction equipment industry, BJP-ruled states led the pack in building of national highways in 2014-15, with Rajasthan, Madhya Pradesh and Chhattisgarh figuring among the top five performers on this count. BJD-ruled Odisha and Samajwadi Party-ruled Uttar Pradesh were the other two states.

The year saw a slight pickup in construction activity, with 4,409 km of highways being built during the fiscal, up from 4,281 km in the previous year. Yet, the figure was lower than the 5,732 km achieved during 2012-13.
The Narendra Modi government has cleared 1,231 projects for 37,000 km to meet its target for highways sector as part of a strategy to spur infrastructure development.

The construction equipment industry , which saw a 10.8 per cent fall in demand in 2014-15, saw a turnaround in the first quarter of the current fiscal.

The spurt in road construction led to a 93 per cent surge in bitumen imports in 2014-15, when 13 km of roads were built on average every day under the Modi government compared to 3 km in the last days of the previous regime.

The National Highways Authority of India (NHAI) could not award the targeted projects due to the economic downturn in 2013-14.

However, the government has decided to kick-start projects on the engineering, procurement and construction mode (EPC) which entails en tire funding from the Union budget. "Things have started to move in the right direction and we are seeing a bottoming out trend in demand. Increased public expenditure on infrastructure is a good sign," said equipment manu facturer JCB India's manag ing director and CEO, Vipin Sondhi.

Participation of the private sector in projectsis yet to gath er pace. The road ministry is in the process of receiving bids for projects totalling 700 km and worth Rs 9,200 crore offered on BOT-toll mode in the first quarter of the current fiscal.

(Image credits: Indiatimes)