Democracy and political stability are important aspects for economic development. Recent changes in the political climate of the world´s largest democracy has once again ignited a ray of hope for the country to realise its potential to emerge as an economic superpower. Since the 1980s, liberalisation and de-regulation efforts in India created foreign investment opportunities thereby accelerating its economic growth rate. Despite the global crisis of 2007-08, India continued to attract foreign investment and even during the post-recession period, our country consistently posted better comparative growth figures as compared to many economies around the world.
However, many felt that even though India might have escaped the global recession or crisis, it continues to be plagued with economic impediments such as high fiscal deficit, sluggish industrial growth, high inflation, larger current account deficit and growing imports. Consequently, the plummeting growth rate can negatively impact future investments and lead to unemployment. Excise duty cuts and tax concessions may provide stimulus to the Indian economy but these simultaneously need to be backed by mechanisms to manage expenditure and subsidies.
Problems and solutions
Inflation continues to be a recurrent problem fuelled mainly by rising wages, property and food prices, which are related to cost. As a growing economy, there is an inevitable demand of foreign imports in India, which has been responsible for a big current account deficit. Added to this, the scale of the export sector remains unmatched to the import sector, thereby causing rupee devaluation. Despite years of economic growth, budget deficit for the year 2012-2013 was 4.8 per cent of the GDP and public sector debt was 68.05 per cent of the GDP, one of highest for a developing economy. The uneven growth failed to reach the isolated rural areas, which are still characterised by poor infrastructure, illiteracy and increasing income inequality. The newly elected government has rightly emphasised on ´infrastructure´and ´make in India´ as solutions for key economic drivers. The Indian construction sector, valued at more than US$ 126 billion, is the second largest sector in the country and accounts for most FDI inflow, besides providing employment to over 35 million people. The 2014 budget reflects the importance of contribution of this sector towards India´s economic growth and has stipulated plans for industrial corridors, smart cities, highways, metro projects, energy investments, expressways and new airports - all of which contribute towards development.
Some of the budget highlights concerning the real estate sector include the sum of Rs 7,060 crore provided in the current fiscal as a seed investment for developing 100 smart cities; extended additional tax incentive on home loans; Rs 100 crore for setting up a National Industrial Corridor Authority; proposed investment of Rs 37,880 crore in national highways and state roads; scheme to develop new airports in Tier-I and Tier-II cities; a green energy corridor project being implemented to facilitate the generation of renewable energy across the country; and Rs 1,000 crore for setting up institutions such as AIIMS and IITs.
In context of the above background, there are tremendous opportunities for established firms to set up a pole position for the upcoming upsurge in the growth of infrastructure. AECOM has effectively used the last few years of slowdown to consolidate its business and position itself in areas where growth is anticipated. With its new business line ´Building + Places´, the company is focusing on an integrated design approach with a basket of services like master planning, landscape, MEP, structure, geo-technical, traffic planning, project management and quantity surveying, all interwoven in the fabric of sustainability for which its contribution is undisputed in the Indian green building movement. The pan-India local presence is backed up effectively by a battery of international experts in the field of sports, healthcare, hospitality, data centres, smart cities and industrial segment. AECOM is already helping the government take its first steps towards the realisation of its dream to set up smart cities wherein its planning team will prepare the feasibility report and master plan for Dholera in Gujarat, and Global City - a green sustainable township in Manesar - which are part of the 1,482 km Delhi-Mumbai Industrial Corridor (DMIC).
One of the focus areas of investment for the company is in its employee skill development.
The implementation of BIM platform across all disciplines has helped increase productivity as well as provide cutting-edge solutions in building performance analysis through its tools of Computational Fluid Dynamics (CFD) studies, fatade performance optimisation, energy modelling and artificial lighting analysis, which are integrated with a 3D drawing platform used for developing the designs. It is for this reason, AECOM in India boasts of 37 LEED or Indian Green Building Council (IGBC) Platinum rated projects to its credit and the list is growing exponentially. Besides, the company´s strength in the infrastructure segment is echoed through its other business line, ´Civil and Infrastructure´ (C&I), with focus on metro, highways, airports, railways, defence and other related areas to provide India access to the best in technology.
About the Author:
Ashish Rakheja, Managing Director-Building Engineering, AECOM India, has a work experience of over 20 years. His expertise includes design and coordination of multi-disciplinary engineering activities. He heads the team of AECOM engineers and has hands-on working experience for a number of projects pan-India. He has handled design activities of services for the design of 37 LEED Platinum rated green building projects in the country.
Yohaan Cama, Sustainability Expert, AECOM India, is a dynamic professional with rich experience in providing sustainable building solutions, project management and project facilitation of green building rating systems.