Module-3

Position of construction industry vis-à-vis other industries:

The Construction industry of India is an important indicator of the development as it creates

investment opportunities across various related sectors. The construction industry has contributed
an estimated US$ 3000 billion to the national GDP (PPP) in 2011-12 (a share of
around 19%).[1] The industry is fragmented, with a handful of major companies involved in the
construction activities across all segments; medium-sized companies specializing in niche
activities; and small and medium contractors who work on the subcontractor basis and carry out
the work in the field. In 2011, there were slightly over 500 construction equipment manufacturing
companies in all of India. The sector is labor-intensive and, including indirect jobs, provides
employment to more than 49.5 million people. The construction sector is visualized to plays a
powerful role in economic growth, in addition to producing structures that adds to productivity
and quality of life. Economic development is a term that economics politician and other have used
frequently in the 20th century, modernization westernization and specially industrialization are
other terms people have used while discussing economic development. Economic development
has a direct relationship with the environment. Government undertaking to meet go abroad
economic objectives such as price stability, high employment and sustainable growth, such efforts
include financial and economic policies, regulations of financial industry trade and tax policies.

Five year plan outlays for construction:

1. First Five Year Plan:

 It was made for the duration of 1951 to 1956.
 It was based on the Harrod-Domar model.
 Its main focus was on the agricultural development of the country.
 This plan was successful and achieved growth rate of 3.6% (more than its target)

2. Second Five Year Plan:

 It was made for the duration of 1956 to 1961.
 It was based on the P.C. Mahalanobis Model.
 Its main focus was on the industrial development of the country.
 This plan was successful and achieved growth rate of 4.1%
3. Third Five Year Plan:
 It was made for the duration of 1961 to 1966.
 This plan is called ‘Gadgil Yojna’ also.
 The main target of this plan was to make the economy independent and to reach
self active position of take off.
 Due to china war, this plan could not achieve its growth target of 5.6%

4. Plan Holiday:
 The duration of plan holiday was from 1966 to 1969.
 The main reason behind the plan holiday was the Indo-Pakistan war & failure of
third plan.
 During this plan annual plans were made and equal priority was given to agriculture
its allied sectors and the industry sector.

5. Fourth Five Year Plan:

 Its duration was from 1969 to 1974.
 There were two main objective of this plan i.e. growth with stability and progressive
achievement of self-reliance.
 During this plan the slogan of “Garibi Hatao” is given during the 1971 elections
by Indira Gandhi.
 This plan failed and could achieve growth rate of 3.3% only against the target of
5.7%.

6. Fifth Five Year Plan:

 Its duration was 1974 to 1979.
 In this plan top priority was given to agriculture, next came to industry and mines.
 Overall this plan was successful which achieved the growth of 4.8% against the
target of 4.4%.
 The draft of this plan was prepared and launched by the D.P. Dhar. This plan
was terminated in 1978.

7. Rolling Plan: This plan was started with an annual plan for 1978-79 and as a continuation
of the terminated fifth year plan.
 8. Sixth Five Year Plan:
 Its duration was from 1980 to 1985.
 The basic objective of this plan was poverty eradication and technological self-
reliance.
 It was based on investment yojna, infrastructural changing and trend to growth
model.
 Its growth target was 5.2% but it achieved 5.7%.

9. Seventh Five Year Plan:

 Its duration was from 1985 to 1990.
 Objectives of this plan include the establishment of the self sufficient economy,
opportunities for productive employment.
 For the first time the private sector got the priority over public sector.
 Its growth target was 5.0% but it achieved 6.0%.
Annual Plans: Eighth five Plan could not take place due to volatile political situation at the center.
So two annual programmers are formed in 1990-91& 1991-92.

10. Eighth Five Year Plan:

 Its duration was from 1992 to 1997.
 In this plan the top priority was given to development of the human resources i.e.
employment, education, and public health.
 Duing this plan Narasimha Rao Govt. launched New Economic Policy of India.
 This plan was successful and got annual growth rate of 6.8% against the target of
5.6%.

11. Ninth Five Year Plan:

 Its duration was from 1997 to 2002.
 The main focus of this plan was “growth with justice and equity”.
 It was launched in the 50th year of independence of India.
 This plan failed to achieve the growth target of 7% and grow only at the rate of
5.6%.

12. Tenth Five Year Plan:

 Its duration was from 2002 to 2007.
 This plan aims to double the per capita income of India in the next 10 years.
 It aims to reduce the poverty ratio 15% by 2012.
  Its growth target was 8.0% but it achieved only 7.2%.

13. Eleventh Five Year Plan:

 Its duration was from 2007 to 2012.
 It was prepared by the C. Rangarajan.
 Its main theme was “faster and more inclusive growth”
 Its growth rate target was 8.1% but it achieved only 7.9%

14. Twelfth Five Year Plan:

 Its duration is from 2012 to 2017.
 Its main theme is “Faster, More Inclusive and Sustainable Growth”.
 Its growth rate target is 8%.
 It is the current five year plan of India.
Three-year action plan is document only provides a broad roadmap to the government. The
document does not detail any schemes or allocations as it has no financial powers. Since it need
not be approved by the Union Cabinet, its recommendations are not binding on the government.

The documents of the Nitti Ayog have no financial role. They are only policy guide maps for the
government.

Current budgets for infrastructure works:

Some of the major highlights of Union 2019-20 for Infrastructure are given below:
 The Government of India has allocated Rs.94,071 crore (US$ 14.11 billion) in 2019-20 to Indian
Railways.
 An investment of Rs 5,000,000 crore (US$ 750 billion) has suggested by the Central
Government which aims to improve the railway infrastructure between 2018 – 2030.
 The Central Government has also announced that it will invest Rs.10,000,000 crore (US$ 1.5
trillion) in infrastructure in the next five years.
 Under the Government’s Pradhan Mantri Gram Sadak Yojana-III (PMGSY), it is contemplated
that it will cost Rs.80,250 crore (US$ 12.03 billion) to upgrade 1,25,000 kms of road length in
the next five years.
 The Government has been able to build 30,000 kms of PMGSY Road using Waste Plastic, Green
Technology, and Cold Mix Technology.
 It has been announced that a proposal has been made by the Government of India to permit
investments by Foreign Portfolio Investments (FPIs)/ Foreign Institutional Investments (FIIs) in
debt securities as issued by Infrastructure Debt Fund.
 The Central Government of India has ensured that all the states in India will have access to the
availability of power at affordable rates under the model – One Nation, One Grid.
 The Government of India will launch the Road - Bharatmala phase 2 to improve the state road
networks.
 The model tendency law – promotion of rental housing has been finalised by the Government
of India.
 The metro rail network in India has reached up to 657 km.
 There has been an improvement in the operating ratio by 95% in 2019-20.

Proposed Schemes and Reforms

 Railways, roadways, airways along rail and road linkages and Defence and Connectivity
infrastructure received major emphasis.
 Highest budget allocations for the rail, road and rural infrastructure including rural roads and
rural housing.
 A new scheme for revitalising school architecture by the year 2022, ‘Revitalising of
Infrastructure and Systems in Education’ scheme launched.
 Dedicated funding for affordable housing to make schemes like ‘Pradhan Mantri Awas
Yojana’ more accessible.
 1 crore houses to be built under PMAY out of which 50 lakh houses will be built in the urban
areas.
 To attain the motto of ‘House for all’ by the end of the year 2022. 50 lakh more houses will be
constructed in the urban areas.
 Target to build 100 smart cities under the ambitious ‘Smart City’ project among which 99
cities have been selected. Emphasis will be on offering solar facilities, smart road and smart
infrastructure.
 Increased investment and other help announced for boosting the Education and Health
infrastructure in the country.
 Upgradation and renovation work to be conducted for the improvement of 600 railway stations
in India.
 New tunnel in Sera Pass will be built in order to promote tourism in India, especially in the
north-eastern part of the country.
 Plan to build 2 new planning & architecture schools for IITs and 1 Rail University in
Vadodara for boosting railway operation.
 Construction of 1 government medical college for every 3 parliamentary constituencies along
with the improvement of 24 district-level colleges.
 Under road infrastructure, plans for completion of 9,000 km of National Highway and 3.7 lakh
km rural road construction plan.
 Target of constructing 2 crore more toilets under ‘Swachh Bharat Mission’ in this financial
year.
 Top 10 tourist sites in the country will be converted into exceptional tourist destinations
through marketing, branding and private funding.
 ‘Pay-as-you-use’ system will be introduced by the government for making toll payments.