A view on Indian Construction Industry before and after liberalization.

1. Liberalization of Indian
Economics: A Study on
Construction Industry

2. Contents
› Introduction
› Objectives of the project
› Methodology
› Hypothesis of Research
› Primary Data - Samples
› Questions - Primary data
› Secondary Data – Samples
› Comparison - Primary Data Example
› Comparison – Secondary Data Example
› Results
› Drawbacks of Liberalization
› Conclusion
› References

3. Introduction
Pre – Liberalization era
› Before liberalization India had no access to funds and technology which effected the
infrastructure negatively suppressing the growth of construction industries.
› There were many barricades which hampered the growth of the Construction Industry some
them are taxation structure license raj etc.

4. Post – Liberalization era
There were many changes that happened after the liberalization of Indian economy in 1991. To
study the impact of liberalization on Construction Industry, the post liberalization era has been
categorized into 5 sections.
I.
Characteristics of Market
II.
Access to Financial resources
III.
Access to Technology
IV.
Market Presence
V.
Import license and Export License

5. Objectives of the project
› Objective of the project is to study the effect of Labialization on Indian construction sector
and to compare its accountability in pre 1990-91 to post 1991..
› To study the transformation of unorganized industries into strong competitive organized
industries in India which was mainly fueled Indian Construction sector and related market.
› The main objective of this study is to compare and analyze the markets trends and reforms
brought in with Liberalization.

6. Methodology

7. › Method of collection
– Primary Data : Delphi Method
– Secondary Data : Construction sector publications.
› Sample size
– Primary Data – 10 No
– Secondary Data – 20 No
› Assumption
– Respondent's data were treated as tangiable.

8. Hypothesis of Research
› The study is basically carried out to explain the pre-liberalization and post liberalization era
in construction sector.
› Null Hypothesis can be explained as, “There is no significant changes in the construction
sector after Liberalization in India”.

9. Primary Data - Samples
The Primary Data consists of expert opinion from the construction sector where as the
Secondary data comprises primarily the study of publications by various construction related
organisations and common groups of experts in the field.
Primary data Samples :
1. B. M. Bansal - Former Chairman of Indian Oil Corporation limited .
2. Sudhir Vasudeva - Chairman and Managing Director of ONGC.
3. Arup Roy Choudhury - Chairman and Managing Director of NTPC.
4. Chandra Shekar Verma - CEO of Steel Authority of India
5. R. P. Singh - Chairman of National Highways Authority of India (NHAI)
6. Ajit Gulabchand - Chairman and Managing Director of Hindustan Construction Company
7. R.P Tak - Chairman-cum-Managing Director of Cement Corporation of India
8. Hemant M. Nerurkar - CEO of TATA Steel
9. Mohandas Saini - CEO of the Construction Division of Shapoorji Pallonji & Co. Ltd.
10. A. M. NAIK - Managing Director and CEO of L&T.

10. Questions formed for the project for the
collection of data from Primary data
1.
What was the characteristics of construction industry before economic liberalization in
1991?
2.
What was the characteristics of construction industry after economic liberalization in
1991?
3.
How do you explain the impact of liberalization of Indian economy on Construction
Industry?
4.
What are the most notable changes that took place after the liberalization of Indian
economy?
5.
Which fields in Construction Industry have changed after liberalization of Indian
economy?

11. 6.
What is the impact of liberalization on the employment in Construction Industry?
7.
What is the impact of liberalization on construction technology?
8.
What is the impact of liberalization on Imports and exports?
9.
How does the liberalization helps in the progress of Construction Industry?
10. Do you think there is a development in Construction Industry after Liberalization of Indian
economy?

12. Secondary Data – Samples
This comprises primarily the study of publications by various construction related organisations and
common groups of experts in the field. This consists of the companies statistics from the preliberalization to post liberalization era. The statistics are also collected by some key consultancies in
construction sector. To study this we have kept the sample size for this to be 20.
1. Indian Oil Corporation Limited
11. Madras Cements
2. Hindustan Petroleum Corporation Limited
12. National Highways Authority of India
3. Bharath Petroleum Corporation Limited
13. Coal India Limited
4. Oil and Natural Gas Corporation
14. Indian Railways
5. National Thermal Power Corporation Limited
15. IRCON Limited
6. Steel Authority of India Limited
16. Larsen & Toubro
7. TATA STEEL
17. Shapoorji Pallonji Group
8. Jindal Steels
18. Gammon India
9. Cement Corporation of India
19. GMR Group
10. India cements
20. Hindustan Construction Company

13. Comparison - Primary Data Example

14. Comparison - Secondary Data Examples
Consumption of Steel - Data by SAIL
Revenues from IOCL

15. Results
i.
The Liberalized economic policy, adopted by the Govt. of India in July 1991, sought to
deregulate & de-license the core sectors with partial disinvestments of Govt. Equity in Public
Sector Undertakings & other measures.
ii.
The most notable changes that took place after 1991 were in the field of employment,
technology and trade which in turn increased the GDP constituting the growth of Indian
Economy.
iii.
The Construction Industry became financially and technically secured after 1991 liberalization.
iv.
As the restrictions on the trading were eased the technology transfer became very easy.
v.
The liberalization has helped the construction companies create more jobs and which also
effects the education system to modernize itself so that we can decrease the dependency on
foreign countries.
vi.
Today it employs over 3 crore people and it generates more than ₹10,000 crores in revenue.

16. Drawbacks of Liberalization
› Many subsidies on materials reduce the income of the country.
› Loss to domestic units.
› Increase dependency on foreign industries.
› Concentration of industries over service sector reduced the scope for innovation.
› The small vendors and manufacturers are the ones who will be affected most.

17. Conclusion
By comparing both primary and secondary data it is been concluded that the Null hypothesis
defined in the project is rejected and the alternative hypothesis is accepted, which means there is a
significant change in availability of technology, resources, access to funds and growth in innovation
and employment.
Analyzing the above samples we can see that there was dip in the growth of construction from 60
per cent in 1970-71 to 34 per cent in 1990-91. Thereafter, it increased to 48 per cent in 1993-94 and
stood at 44 per cent in 1999-2000.
The construction industry has contributed an estimated ₹
670,778 crore to the national GDP in
2011-12 (a share of around 8%). In 2011, there were slightly over 500 construction equipment
manufacturing companies in all of India. The sector is labor-intensive and, including indirect jobs,
provides employment to more than 35 million people. In the 21st century, there has been an
increase in the share of the construction sector in GDP and capital formation.
So we can conclude that the Liberalization of Indian economy has helped the construction Industry
to grow.

18. References
› Indrajit Bairagya: Liberalization, Informal Sector and Formal-Informal Sectors’ Relationship: A Study of
India
› G OFORI - Department of Building, National University of Singapore: Challenges of Construction
Industries in Developing Countries: Lessons from Various Countries
› Sarbapriya Ray - Dept. of Commerce, Shyampur Siddheswari Mahavidyalaya: A Post-Liberalization
Period Analysis of Industry Specific Economic Factors Affecting Capacity Utilization in Indian Aluminium
Industry
› Arpita Mukherjee - Indian council for research on international economic relations: Trade in construction
and consultancy services: india and the gats
› Shujiro Urata - Senior Economist, Japan Center for Economic Research Professor, Waseda University:
China and India Continue High-Speed Growth
› Human Resource and Skill, Requirements in the Building, Construction Industry and Real Estate
Services: Study on mapping of human resource skill gaps in India till 2022
› Indian Mirror: A report by Builders' Association of India (BAI), Indian Construction Industry, Builders'
Association in India.

19. › Uma Sankaran, Vinoj Abraham, Centre for Development Studies, Trivandrum, Kerala (INDIA): Impact of
trade liberalisation on employment
› Study for DG Regio Final report: “The impact of globalisation and increased trade liberalisation on Asian
regions”
› Sonia Bhalotra, University of Bristol, UK: The impact of economic liberalization on employment and
wages in India
› Indian Mirror: Indian Construction at A Glance iin 2011-2012, Indian Construction Industry, Construction
Industry, Construction Sector, Construction Industry of India
› Indian Mirror: Indian Construction Equipment Manufacturers Association (ICEMA), Indian Construction
Industry, Construction Equipment of India.
› Dilip Saikia: Indian Economy after Liberalisation Performance and Challenges
› Indian Economics: Industrial policy of 1991 in India
› Ashok Bardhan and Cynthia A. Kroll - Haas School of Business, UC Berkeley: Globalization and the
Real Estate Industry: Issues, Implications, Opportunities
› Dr. (Mrs.)Anita Kumari, Sir Ratan Tata Fellow, Institute of Economic Growth, University of Delhi Enclave:
LIBERALISATION AND SOURCES OF INDUSTRIAL GROWTH IN INDIA: AN ANALYSIS BASED ON
INPUT-OUTPUT APPROACH
› Petia Topalova - Research Dept. IMF, Amit Khandelwal - Columbia GSB, BREAD, NBER: Trade
Liberalization and Firm Productivity: The Case of India
› Baldev Raj Nayar: India’s Globalization: Evaluating the Economic Consequeces.

20. THANK YOU