The construction sector to witness growth of 16.8 percent in the April-June quarter of FY2023 according to the Ministry of Statistics and Programme Implementation. This, as per experts, is on account of the government’s focus on infrastructure projects.
India's GDP growth surged to 13.5 percent in April-June from 4.1 percent the previous quarter, data released on August 31 by the Ministry of Statistics and Programme Implementation showed. The sharp uptick in growth was driven by a favourable base effect and the ongoing economic revival.
The construction sector has expanded by 16.8 percent in the first quarter of FY23 over a relatively normal GVA of last year – from Rs 225,166 crore in 2021-2022 to Rs 262,918 crore in 2022-2023. It was at Rs 131,437 crore in 2020-2021. Last year’s gross value added (GVA) was at 71.3 percent on account of a low base rate in 2020-2021 due to construction coming to a grinding halt during the initial phase of COVID-19.
This year, it has grown by 16.8 percent due to the government’s focus on infrastructure projects and despite the RBI’s intervention to tame inflation and increase the policy rates by 140 bps in the last three months.
The growth was possible this year on account of the government’s focus on infrastructure projects this year. Going forward, this growth trajectory will be maintained but there may be a moderation or plateauing of the growth rate on account of the inflationary outlook and the increasing interest rates, Das said.
The financial, real estate and professional services sector also showed a growth trajectory in the first quarter of 2022-2023 at 9.2 percent compared to 2.3 percent in 2021-2022. The GVA was at Rs 880,313 crore in 2022-2023 and Rs 805,847 crore in the April-June period of 2021-2022.