Sanjay Thapa

New Delhi, June 3: In a bid to quarry the common foe — economic slowdown — the private sector contruction industry and major business chambers are planning to come together on a common platform.

Apex business chambers like Confederation of Indian Industry (CII), the Associated Chamber of Commerce and Industry (Assocham) and Federation of Indian Chambers for Commerce and Industry (Ficci) as well as publc sector Housing and Urban Development Corporation (Hudco), National Real Estate Developers Corporation and Connstruction Industry Develoment Council (CIDC) will be the main players in this novel initiative.

“We are in consultation with the chambers like CII, Assocham and Ficci to workout a joint intiative,” said Hudco chairman and manging directoe V Suresh.

Seeing a strong corelation between stoking the contruction sector and a way to kick-start economic growth, the joint platform plans to work towards a common goal. In fact taking a step towards this direction, Hudco has already tied-up with Ficci’s department on housing and human settlements last week for a continuos interaction.

The coming together of the institutions would enable a more realistic framing of policies and future strategies which would finally be proposed to the government, said sources.

In fact, the initiative has also been founded on a recent study by Hudco wherein it was revealed that construction sector ranked higher in terms of spurring income growth in the economy as compared to transport and the agriculture sectors, normally thought to the engine for growth and employment generation.

Hudco says that a 10 per cent increase in the final expenditure in the construction sector will generate an increase of more than Rs 28,000 crore in gross national output, in addition to the direct and indirect generation of income wich is expected to add more than Rs 62,000 crore to the national output.

In terms of employment generation too, the sector ranks fifth as compared to other sectors. With this an additional unit of final expenditure in the contruction sector enables a multiplier effect resulting in an eight-fold increase in the employment generation in the economy. In fact, Hudco has also revealed that there exists a strong inter-industry linkages of the housing investment upon the economy in terms of economic growth through employment and income generation. The common initiative would also tackle various bottlenecks like techno-legal complexities that are poised to toll of the sector’s growth prospects in the current fiscal.

This includes woes like the high cost of funds, delay in according industry status to the sector, non-notification of the new rent control act as well as long lead time between procurement and acquisition of work. With these hurdles even a bullish housing finance sector has had a mellowed impact on the sector.

With the year-end housing loan disbursal targets for 2001-2002 expected to see a jump of 40 per cent, housing construction sector is being seen as major source of reviving the economy in the coming months.