India’s construction industry employs about 31 million persons – second only to agriculture in terms of employment. It consumes 40-50% of the National Plan outlay and contributes 20% of GDP. The industry contributes nearly 12 per cent to the GDP; also it has a multiplier effect on between 1.8 and 2 percent on industries such as steel, cement, aluminum and petroleum. Infrastructure and housing sectors are the key drivers of demand for the construction industry and the reason behind recent uptrend in construction activity in the country. Construction, which accounted for around 6% of the GDP in terms of value added till as recently as 2003-04 has doubled its share to 12.5% of GDP in 2006-07. Infrastructure Construction however would account for around 2.2% of GDP as infrastructure spending has remained at 4%.
India's construction equipment sector is growing at over 30 per cent annually. The order books of the 10 largest construction companies in India have swelled by over 50 percent year-on-year. Annual cement consumption has breached the 150-million tonne mark for the first time.
The production of cement during April -May 2006 at 27.09 MT was 8.9% higher than the production for the corresponding period of the previous year. The growth rate at 8.9% remained lower as compared to 12.6% achieved during April -May 2005.