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Indian construction spend seen up 13% in 2001-02

India's investment in construction activity is forecast to grow by 13.33 per cent in the current year to March, down marginally from the past year's 14.06 per cent growth, a leading industry body said.

The Construction Industry Development Council, which includes representatives from the government and the private sector, said it expects investments in infrastructure to grow 14.3 per cent this year up from 13.9 per cent in the previous year.

The forecast was part of a report the body will present at the Asia Construct Conference on Friday in New Delhi.

It said investments in commercial and industrial construction would slow to 8.82 per cent from 13.3 in the previous year, while residential construction investment growth would drop to 2.86 per cent from about 16.7 per cent in the year earlier.

Spending on infrastructure is expected to make up 89.3 per cent of total investment while residential construction would contribute 5.29 per cent. Commercial and industrial construction account for the remaining.

The government sector would contribute 67.5 per cent of the total investment in construction activity, the report said.

Construction contributed 13.29 per cent of India's GDP in 2000-01 (April-March) and employed 32 million people, the report said quoting data from India's Central Statistical Organisation.

A Reuters poll of 10 research houses released on Thursday forecast India's GDP to grow by 5.2 per cent in 2001-02, the same as in 2000-01.

The growth has slowed over the past two years from 6.4 per cent in 1999-2000 and 6.6 per cent the year before.

The report says land prices in major Indian cities fell sharply in the past year to March as large private realtors were allowed into development, a foreclosure and mortgage law was implemented and a rule on urban land ceiling was dropped.

It estimated the price of commercial land in New Delhi had dropped to $210 a square feet in 2000-01, down 8.7 per cent over the previous year.

Prices of residential land were estimated to have dropped by 27.5 per cent to $185 a square feet and of industrial land by 18.8 per cent to $130 a square feet, it said.

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