With over 50 per cent of the demand stemming from the infrastructure sector, construction equipment industry is set to grow to $5 billion. Sameer Malhotra, CEO, Shriram Automall India (SAMIL), writes more on how the organised used equipment market adds to the growth of infrastructure equipment market in India.
Construction equipment today not only makes it easier to complete the project at hand, but also ensures the efficient use of labour, time and money. About 30-35 per cent of money involved in construction is dedicated towards procurement of good machinery and equipment.
Evolution of tools to machines
Centuries ago, development of tools started with humans where hands and teeth were the first tools used to pick, dig, break, scrape, and shape. They were used to make other tools and shelter. Eventually simple tools were used to create a better living environment. Improved tools resulted in increase of the amount and speed with which construction work. Therefore, the scale and complexity of construction projects increased and this same development cycle continues today.
In line with equipment development, the study of productivity and cost for equipment have also become more sophisticated, as now machines are designed to be extensions of the operators. Manufacturers are now able to provide tested and documented technical and operating information to better help users understand impacts on their work production. Importantly, they are able to communicate best practices to increase production and promote safe operation.
In India, the CE industry is considered to be the second-largest employer and contributor to economic activity. Over 50 per cent of the demand for construction activities in India comes from the infrastructure sector, while the rest comes from industrial activities, commercial and residential development etc.
The need for and dependency on heavy construction equipment in the country has grown with size and complexity of construction projects. The development of automated heavy construction equipment for earthmoving, excavating, and lifting occurred in the last two decades. Today, it is assumed that if equipment does not exist to perform a necessary task, it can be designed and built. So, heavy construction equipment manufacturers are very responsive to market needs and feedback from users. Hence, we can say, design and development of heavy construction equipment is driven and evolved from the needs of the user market.
Government of India while paving the way for a better quality of life and a rapid rise in gross domestic product (GDP), looks forward to focus on the infrastructure of the country for further growth. As the country's infrastructure holds the key to potential which both India and SAMIL understands.
As outlined in the next Five Year Plan (FYP), infrastructure will be the focus area for spending, about Rs 31 trillion ($454.83 billion) earmarked for investment with 70 per cent of funds needed for power, roads and urban infrastructure segments. The Government of India has planned an investment worth Rs 45,000 crore ($7.07 billion) for the development of India's north-eastern regions bordering China, Bhutan, Bangladesh and Myanmar.
At the same time, the Ministry of Road Transport and Highways invested Rs 14,916 crore ($2.32 billion) in the Special Accelerated Road Development Programme for North East (SARDP-NE) and Rs 4,095 crore ($635.6 million) for the national highways over the past two years to improve the road infrastructure in India's north eastern region.
Also in the Union Budget 2017-18, the Government of India has taken the following measures for the development of infrastructure, resulting in growth of the equipment industry: