Employment growth in construction over six years has been 44 million

Dr Pronab Sen, Principal Advisor, Planning Commission, Government of IndiaHighlighting the need for skill development, Dr Pronab Sen, Principal Advisor, Planning Commission, Government of India, and the Guest of Honour at the awards, talks of this being the greatest obstacle to growth in the economy.When I joined the Planning Commission over 20 years ago, I don’t think such an event would have occurred. Construction was never seen as an activity to be proud of. Shortly, after I joined the Planning Commission, it set up the Construction Industry Development Council. This was the first time anybody had paid attention to construction as a core development activity.The extent to which things have changed is remarkable. As a statistician and macro economist, we look at the efficiency of a sector in terms of its level of capitalisation and how productive that use of capital is. When I looked at the construction sector for the first time in 1995, it had extraordinarily low levels of efficiency. Today, we are standing in a situation where we have companies in India that can take on global challenges. This has happened in an incredibly short period of time.It would be too much for the government to take credit for this. But it did play a role because the real change, the tipping point came in the year 2000. Before that, all parameters of efficiency were pretty much stagnant. Since then, up to 2009, the progress has been remarkable. I don’t think any other sector can show those kinds of feathers. The only other industry that actually did was the software sector. But it had a great advantage – it started from a zero base. But the construction industry has been there all along. So it doesn’t have a base effect but the efficiencies that have come in are remarkable.There is another dimension. Everyone talks of construction being the second largest employer in India after agriculture. People don’t recognise that during the course of the year 2000, the construction industry had been the single largest employer of new workforce, with agriculture a distant third. The overall growth of employment in construction over a period of six years has been 44 million people.So indicators of efficiency are going up on one side and indicators of employment are going up equally rapidly. This is rare. So this is a matter of pride for the Indian construction sector. It’s not only pulling itself up by the bootstraps; it is doing so with a huge contribution to the national economy.It is also becoming evident how poor our systems of skill development for the construction sector have been. When we were preparing the Eleventh Five-Year Plan, the construction sector was the first to talk about skill shortages. It came as a complete surprise because we had thought of construction as a sector with low skill requirements. Since then, we are now working with skills as the number one constraint to growth in the economy; it’s not capital any longer.The skill development processes are just beginning to be put in place. You will hear numbers...like 50 million people would need to be skilled over the next five years. Of that, probably 28-30 million will be in the construction industry. The government is trying to collaborate with the industry to set up systems where imparting skills becomes a joint activity. We have had some success but unless we ramp up very rapidly, we will not be skilling 10 million people a year; we would be lucky if we skilled 2-3 million.There is a huge challenge and we really need your cooperation. This crowd represents the cream of the sector and our dialogue needs to be with all of you. I look forward to meeting you on a more business-like platform as this is celebratory.For the complete version of the speech, visit www.constructionworld.in/Pronab_Sen