India's construction sector to employ 100 mn: Report

India's construction sector is poised to play a crucial role in the country's economic growth by employing a whopping 100 million people, according to a recent report by Knight Frank India. As the second-largest employment generator in India, the construction sector is estimated to engage around 71 million workers by the year 2023.

However, a significant challenge lies ahead for the industry as over 80% of the current workforce remains unskilled. Only 19%, approximately 1.3 million, are classified as skilled employees, which includes engineers, technicians, and clerical staff. Furthermore, there are 4.4 million core skilled workers, while 6.9 million have received vocational training.

The National Skill Development Council (NSDC) reveals that the real estate sector absorbs 87% of these workers, leaving the infrastructure sector with the remaining 13%. This raises concerns about the lack of a skilled workforce in both industries.

The report by Knight Frank sheds light on the need for skilled personnel, especially civil engineers. Between 2012 and 2021, approximately 8,96,864 core skilled employees, including civil engineers, entered the sector. It is projected that by FY2029-30, there will be a demand for around 17 lakh civil engineers, growing at a Compound Annual Growth Rate (CAGR) of 10.4%, with an annual increment of 1.8 lakhs.

To address this demand, India currently boasts nearly 3,200 universities and colleges offering full-time construction-related courses. However, further efforts are required to enhance the quality of education and training to produce a highly skilled workforce capable of meeting industry requirements.

The construction sector's significance in India's economic growth cannot be overstated. Over the past decade, the sector has demonstrated remarkable progress, with a CAGR of 11% in output from both infrastructure and real estate. Together with real estate services and dwelling ownership, the construction sector contributes a substantial 18% to the country's total economic output.

Moreover, foreign investors have shown immense interest in India's construction sector. Between FY 2012-22, the sector attracted an impressive cumulative FDI inflow of $35 billion, highlighting its potential for future growth.

Looking ahead, the output from India's real estate sector is projected to reach $1 trillion by 2030, a significant increase from the current $650 billion. Residential demand, commercial developments, retail expansions, hospitality ventures, and warehousing developments will drive this growth.

Shishir Baijal, Chairman, and Managing Director of Knight Frank India emphasized the essential role played by the construction sector in India's economic growth. He stated that India's economy has witnessed significant expansion over the years, and the construction sector's growth has been closely aligned with the country's GDP growth. To ensure optimal growth, Baijal stressed the need for a skilled and semi-skilled workforce to maximize productivity levels in the construction sector.