Need for fast-track clearances
The Budget for 2022-23 assumes key significance from the point of view of reviving growth in the construction equipment industry post-Covid19. The $ 6.5 billion Indian Construction Equipment Industry plays a critical role in supporting infrastructure development in the country and is a lifeline to the Government’s flagship Infrastructure projects, including the National Infrastructure Pipeline and the recently launched Gati Shakti National Master Plan.
The Construction Equipment Sector Vision Plan 2030 envisages trebling industry volumes by 2030 and making India the second largest Construction equipment market in the world. To achieve this, we need policy interventions directed towards creating sustained infrastructure demand, ensuring faster execution of projects and a building a robust financing ecosystem.
For instance, National Highway construction from April to November of FY22 was down 18% YoY, while awards during the same period were down 18% YoY, which is of great concern. Efficient coordination between the Centre and State Governments is therefore important to fast-track clearances and reduce project delays.
Spiralling inputs costs, especially the unabated increase in prices of essentials like steel and cement need to be addressed urgently as this is dampening the sentiment for investment in heavy machinery.
Another key area of focus includes skill development in the construction equipment Industry as demand for skilled equipment operators is expected to increase manifold over the next decade. The construction equipment industry is the perfect candidate for the Government’s PLI Scheme, which will be instrumental in encouraging investment for localisation of components such as hydraulics, cylinders and electronics. This will help build a robust domestic supply chain for the sector and enable India become a global manufacturing and export hub for construction equipment.