ASSIGNMENT – II, III & IV

BUILDING ECONOMICS
BACHELOR OF ARCHITECTURE

SUBMITTED BY:
JASKIRAT ARORA
Roll No. 1731681
IXth Semester

I.K. GUJRAL P.TU. KHUNNIMAJRA CAMPUS, MOHALI

KHARAR-BANUR HIGHWAY, KHUNNIMAJRA, SECTOR-115, MOHALI

CONSTITUENT CAMPUS OF

I.K. GUJRAL PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

Kapurthala-Jalandhar Highway, Kapurthala

 LIFE CYCLE COST ANALYSIS

What is the Life Cycle Cost Analysis?

A life cycle cost analysis (LCCA) is an analysis methodology that enables engineers,
designers, and decision-makers to better understand the economic impacts of infrastructure
decisions over time along with the opportunities that exist to reduce impacts.
Used to examine and assess the total cost of resource ownership and takes into account
expenses related to buying, maintaining, operating and disposing of a project.

Purpose
The purpose of this analysis is the estimation of the overall cost of project options and then
select the designs which can ensure the facility to provide the overall lowest cost of
ownership constant with the function and its quality.
The analysis should be performed at an early stage so that there will be chances of refining
the design to ensure the reduction in life cycle total cost.

Life cycle cost analysis diagram

The life cycle cost analysis diagram represents the

working of the whole cycle as it includes all the
activities which are necessary for better results.
This shows the stepwise procedure of life cycle cost
and how it will impact the project on a large scale. It
is the easiest way of accumulating the cost as per the
specified time.

Cost to be considered Typical costs for a system may include:

Acquisition costs (or design and
development costs).
Operating costs: Cost of failures, Cost of
repairs, Cost for spares, Downtime
costs, Loss of production
Maintenance costs: Cost of corrective
maintenance, Cost of preventive
maintenance, Cost for predictive
maintenance, Disposal costs.
Factors that will affect long term cost
1. Programmed maintenance costs – This includes all future replacement cost.
2. Responsive maintenance costs – Based on responses to random failures.
3. Cyclic maintenance costs – Required on a periodic basis, e.g., Painting
4. Disposal cost – The disposal cost is increasing expensive (includes abandoning the
site).
5. Running costs / costs in use – Include all costs in association with the use of the
building.
6. Modification of use costs – Changes in use over the years like commercial, industrial.
7. Expansion costs – Consideration of future expansion needs

Benefits
Following are the benefits of the analysis:

• It will result in earlier actions for the generation of revenue.

• Lower costs than other methods or techniques.
• It shows an accurate and realistic assessment of costs and revenue within a specified
life cycle stage.
• It promotes long-term worthwhile.
• It gives an opportunity for total incremental costs over the whole span of time.
• It will provide management awareness of the resources required to be purchased
and the drive cost of it.
• This technique will not only focus on the cost but also other factors like the quality of
goods and the services that must be provided.

Disadvantages

• Time-Consuming: This analysis is way too long because of changes in the new
technology with future stability.
• Costly: The longer project means the long-time duration which makes it more costly
than other methods.
• Technologically Outdated: As technology changes day today so it provides the
possibility of outdated technology.
• Less Reliable: It is not a reliable method for facts and figures because some data are
assumed by the companies for the calculation of life cycle cost.

Reference: https://www.wallstreetmojo.com/life-cycle-cost-analysis/

https://cshub.mit.edu/buildings/LCCA

http://www.trentglobal.edu.sg/wp-content/uploads/2016/09/AMM-Unit-6.pdf

https://www.wbdg.org/resources/life-cycle-cost-analysis-lcca
 REDUCTION IN CONSTRUCTION COST

Selection of Plot
Always go for a roadside plot where transportation facility and communication to every
necessary center is possible. Because that can reduce your transportation cost for a
lifetime.
Conduct Soil Test
While selecting a plot, just not focus on the communication facility but do soil test which is
a much essential part of the construction. Because there are different types of soils are
available, and each soil behaves differently. Before buying the plot check the soil if it is a
paddy field, agricultural field, or soil with hard soil.

Because if the soil is not good or if it is loose soil then there you will have to expense a huge
cost. And after if it comes to know that plot having a paddy field then the foundation cost is
huge and again to get permission to make the home is huge. This is the best check when you
are searching tips for how to reduce the cost of house construction

Confirm Electrical and Water Supply in Area

If there is no electric and water connection near your plot then you have to apply for a
separate poll connection near your home and have to make a separate connection for
plumbing, which is again expensive. So, look after these factors before buying a plot.
Choosing Construction Materials
In any type of construction building materials play a major cost-effective role. Among all the
construction material bricks, cement, rod, and sand make a large part of the construction
material.

If you purchase material in the lot (mane one order for whole material) manner then there
will be less expenditure regarding construction material. Because the dealer will give
you more discount as you purchase more amount of material.

Prepare Structural Drawings

Preparing structural drawings for the house is essential. The majority of people ignore this
and don’t know about the structural drawings of buildings.

They only thought about the architectural drawings of the building. But structural drawing is
all about foundation plan detail, framing plan detail, column & beam plan detail and other
structural components of buildings.
From this structural drawing how much amount of rod, sand, cement, and bricks will be
required can be calculated in advance. And if this is done accurately then there is a chance
of saving lots of money. This is important while you are searching for how to reduce
building construction cost.

Saving in Finishing Materials

Not only is the construction material only responsible for rising costs. Along with that
finishing, the material is also responsible. While we consider finishing work there is flooring
material, doors and windows, and especially wooden works for interior absorbs a huge
cost.
But this can be reduced if you are choosing proper material and buying material in bulk
amount at a time. If you are purchasing this material in phase by phase manner the
shopkeeper may not give you a discount, but if you are purchasing in a bulk amount and
from one shopkeeper then you can save your money.
Do not Make Change After Construction Starts
Sometimes people approve one plan before construction and during construction, they
suddenly change their plan. This is one of the major reasons which again increases the
construction cost. Try to avoid this thing unless & until it is necessary.
Go for Pre-fabrication Work
To minimize the cost of house construction you use modern technology. Use prefabricated
parts for the construction of your home. In this type of construction, a part of the building is
constructed at the factory or in a separate place and then combined to a site to make the
house. It has a lot of benefits. It not only reduces the cost but also reduces the time of
construction.

Use Fly Ash Instead of Red Bricks

If you want to reduce the cost then choose to fly ash bricks instead of red bricks or other
bricks. Fly ash bricks are less costly than red bricks but have good strength for construction.
It can reduce the cost of construction in a considerable amount. By adopting these tips, you
can significantly reduce construction cost of house.
Select Good Color and Putter
If you wish to reduce color cost then go for lime-based color. Put the color twice to make
the color brighter. Don’t use putty. Generally, putty is often used when we need a smooth
wall surface or the wall is very rough or there are larger sand particles showing.

To avoid extra cost for putty always purchase the standard size of sand for the purpose of
plastering. If it is used according to standard size, you may not require to apply putty in your
house, and it will save your cost.
Buy Material from Local Vendors

While purchasing materials for construction try to purchase from local vendors because it
will reduce your transportation cost as the transportation of construction material is costly.
Saving in Labor Cost
Labor cost is also a large part of the construction which cannot cut easily. But try to
calculate the works in hours how much labor will be required to finish work and how much
time. In this way you can save your cost by estimating the labor cost otherwise the labor will
work according to their time and you have to expense more.
Saving in Machinery Cost
Construction machines are always hired on a rental basis and their rental cost is too high.
So try to take maximum advantage of construction machinery in a calculated way by which
construction cost can be saved. By taking care of this point you can save cost in
construction.
Saving in Flooring
Flooring can be done both costly or economically. Tiles come in a wide pricing range. Select
one of them according to your budget. Also, cement flooring is a great option for reducing
cost and one of the long-lasting floorings. Red oxide flooring is also a good option.
Saving in Wooden Work
As far as possible, if there is no essential need for wooden work try to avoid it. You can also
try to avoid the use of costly woods for construction Instead You can use a jackfruit tree,
wild jack (jungle jack) and similar wood most available in your place to reduce the total
cost of wood up to 50%.
Selecting Good Shape of House
The shape of the house also contributes to increasing the cost of construction. When the
size of the home increases it increases the surface area and ultimately the cost of
construction. So try design a house in such a way that it will reduce the surface area and
reduce the cost.

Reduce Numbers of Wall

Make the home more spacious by reducing the number of walls. It ultimately reduces the
surface area and also decreases the cost. It also permits natural light to enter the house
and decreases the number of electricity expenses.

In this way, you can reduce the cost of construction

Reference - https://civiconcepts.com/blog/17-tips-for-how-to-reduce-construction-cost
So, there are various cost-effective techniques of construction. Lots of them are also energy
efficient and easily adoptable. Since India is a developing country, the economy have’s
importance There is a need for the adoption of strong, durable, environment friendly,
ecologically appropriate, energy efficient and yet cost-effective materials and appropriate
technologies in construction.

In construction project reduction in cost can be achieved by some of the following

techniques:

a) Value Engineering

b) Material Management

c) Budgetary Control

d) Cost optimization Techniques

e) Cost Reduction Techniques at site

Reference – http://www.ijetmas.com/admin/resources/project/paper/f201509231442990716.pdf
 CONSTRUCTION MATERIALS

Cost-Effective Construction Materials

The materials that are newly introduced are economical and have many advantages over other type
of materials. These materials are called cost-effective modern construction materials.

Every material has its own advantages and disadvantage.

So, the material with more advantages and less cost is called as a cost-effective construction
material. Man, and his activities produce a lot of wastes at the same time man consumes many
things.

New building materials to keep construction costs low

GFRG Panels Pre-Fabricated Panels

Pre-Fabricated panels

Bamboo Fly Ash Brick

Fly Ash Brick

Bubble Deck Slab Terracotta Hollow bricks
Reference – https://www.onmanorama.com/lifestyle/decor/2019/11/08/new-building-materials-construction-costs-low.html
1. LAMINATED VENEER LUMBER

LVL provides a consistent, high-

performance alternative to solid
lumber structural systems. It is
lighter and stronger than traditional
alternatives, faster and easier to
install, enhances productivity, and
reduces forming costs. They are in
composite nature, it is much less
likely to warp, twist, bow, or shrink.

2. AUTOCLAVED AERATED CONCRETE

AAC is a lightweight, precast, foam

concrete building material suitable
for producing concrete masonry
units like blocks. It has improved
thermal efficiency superior fire
resistance. It also helps to reduce
the solid waste during the use, it’s
lightweight and larger. Excellent
material for soundproofing and
acoustic insulation.

3. CARDBOARD

During this lockdown, people have

changed their perspective on how
various materials can be used in
different ways. Vikram Dhawan and
his brother, who runs a cardboard
products factory in Rajasthan. They
also wanted to see how their
business could help with this crisis,
so they hit upon the idea of
inexpensive, recyclable beds from
cardboard coated with a protective
waterproof substance that enables
it to be cleaned quickly and easily.
It’s strong and weighs up to 300kg,
yet lightweight to lift.
4. LIGHT TRANSMIT CONCRETE

These are materials that help in

transmitting light which acts as a
translucent material. It transmits
light to about 20m thickness. This
could be used in giving natural light.
It’s a combination of fibre optics and
concrete. They harm the high
compressive strength of concrete.
The blocks can also include
embedded heat-isolation.

5. SELF-HEALING CONCRETE

Concrete can withstand compressive

forces very well but not tensile
forces. It’s a bio-concrete, created
just like regular concrete, but with
extra ‘healing agents’ mixed in. The
healing bacteria would be intact
throughout mixing and in case of
cracks the water seeps in and
dissolves and activates biological
limestone to heal the cracks
eventually.

6. BAMBOO

This material is known from the

Asian times and was mainly used in
rural areas. Now, its use in different
areas but especially areas which are
earthquake-prone as they have
great strength and also is fire
resistant. Before choosing a bamboo
it’s very important to treat it with a
good amount of chemicals so it is
prevented from termites.
7. STRAW ROOFING

It’s a material which has been used

since ancient times. They are easily
available, lightweight which makes it
easy to transport. They absorb heat
easily as it minimizes the heat loss
and provides a pleasant indoor
climate. This material also reduces
labour costs.

8. NATURAL STONE

As we all know a man-made product

such as a cast of stone and concrete
is readily available, but natural
stone is a completely natural
product that has been extracted
from the ground and is processed.
They aren’t just used in the facades
of the building but also slabs for
kitchen, storage spaces, etc. they
are excellent insulators. Once
invested it will last forever.

9. CORRUGATED IRON

They are relatively lightweight,

portable, and adaptable that is used
as a traditional form of construction.
They are frequently used in the
roofing system, for the walls and the
prefabricated buildings especially.
All metals corrode but, here the
main aim was to slow down the
process. It is one of the cheapest
and the lightest material to
transport.
10. WOOD

It is a natural material, which makes

it readily available and is
economically feasible. This provides
good insulation from the cold; they
can be fabricated into different
shapes and sizes. It is
environmentally friendly which
makes it sustainable.

11. HEMPCRETE

It’s bio-composite material, a

mixture of hemp hulls and lime,
sand which is used in construction
and insulations. They lack in
brittleness compared to concrete
and consequently do not need
expansion joints.

12. RAMMED EARTH

It’s a Chinese technique of

constructing walls, foundations,
floors, etc. It’s a sustainable building
method. It adapts easily to all the
local climate; they usually generate
very little waste. They are
lightweight and can be easily
transported, and also have a low
manufacturing impact.

13. PREFABRICATED PANELS

It is a structure which has been

fabricated at the offsite location.
They are usually constructed as a
column, beam, slab, or just as
panels. They are easily available and
easy to transport as they are
lightweight. They could locally adapt
to any climate.
14. ALGAE CURTAINS

It’s a modern-day construction

where our planet is soon going to
run out of renewable energy. It is a
sustainable building material that
helps in cleaning the air and absorbs
the carbon dioxide and the
pollutants present in the air. It also
helps with the façade of the
building.

15. GLASS FIBER REINFORCED CONCRETE

It’s a composite material produced

by a cementitious matrix with alkali-
resistant glass fibre. It can be
moulded into different shapes and
sizes which helps in the making of
futuristic designs. It has great
strength and is also lightweight.

16. CONCRETE SHEETS

These sheets are readily available in

the market so it’s very quick to
install. It’s a stylish option in making
the façade pleasing. They are
durable, weatherproofing quality,
and fireproof. They are usually
secure and stable.

17. STONE CLADDING

These are options which are opted

when the client wants a pleasing
look but at the same time has a
budget. It can be rustic or modern
and can mimic different types of
stone finishes. It comes in different
thicknesses.
18. RECLAIMED TIMBER

They are one of the cheapest

materials but at the same time
trendy as well. They are more
durable and dried out. They are also
environmentally friendly. Each
shape is unique and irregular in
shape.

19. TRADITIONAL BRICK

They are popular as they last longer.

It is fireproof and also stands down
to any weather condition. They are
available in different sizes. They are
durable and sturdy. They also make
the place look aesthetically pleasing.

20. WASTE MATERIALS

Creative builders use everything

starting from the cigarette butts to
plastic bottles and rubble to build in
homes. They have tried and
incorporated various other waste
materials which can be developed
eventually with technologies.

Reference – https://www.re-thinkingthefuture.com/rtf-fresh-perspectives/a1826-20-cost-effective-materials-in-construction/
 CONSTRUCTION TECHNIQUES

FOUNDATION –
o Random Rubble masonry in mud/ cement mortar placed in excavation over thick sand
bed. Rubble pointing above ground level in stabilized cement mortar.
o Use of lean cement concrete mix 1:8:16 for base with brick masonry in 1:6 cement
mortar footings.
o Use of lean cement concrete mix as above for base and over burned bricks masonry in
cement lime mortar (1:2:12) footings.
o Arch foundations in place of spread foundations.

FOUNDATION COSTS –
Normally the foundation cost comes to about 10 to 15% of the total building.
It is recommended to adopt a foundation depth of 2ft. (0.6m) for normal soil like gravely
soil, red soils etc.
It is suggested to adopt arch foundation in ordinary soils.
In case of black cotton and other soft soils, it is recommended to use under ream pile
foundation which saves about 20 to 25% in cost over the conventional method of
construction.
Arch Foundation –
o This type of foundation was used in olden times where in spread foundation is replaced
by inverted arch.
o It reduces the construction cost up to 40%
o Advantage – In soft soil that the depth of foundation can be greatly reduced
o Disadvantage – The end piers have to be specially strengthened by buttresses so as to
avoid the thrust to arch action tending to rapture the piers junction.
Plinth –
o It is recommended to adopt 1 ft. height above ground level for the plinth and may be
constructed with a cement mortar of 1:6.
o The plinth slab of 4 to 6” which is normally adopted can be avoided and in its place brick
on edge can be used for reducing the cost.
o By adopting this procedure, the cost of plinth foundation can be reduced by about 35 to
50%.
Walls –
o Brick work in 1:6 cement mortar using bricks from black cotton and inferior soil
stabilized with fly-ash.
o Rat-trap bond brick work in 1:2:12 cement lime mortar/ 1:1.5:3 cement sand mortar.
o Hollow concrete block masonry in cement mortar.
o Compressed mud blocks masonry in mud mortar.
o Stabilized mud blocks masonry (4% cement or lime) in stabilized mud mortar.
o Sand lime brick walls in 1:6 cement mortar.
o FAL-G sand block with 1:6 cement mortar.
o While laying bricks, the manner in which they overlap is called the bond.
o The rat-trap bond is laid by placing the bricks on their sides having a cavity of 100mm
with alternate course of stretchers and headers. The headers and stretchers are
staggered in subsequent layers to give more strength to the walls.

This technology has about 25% overall-saving on cost of a building of traditional 9”

construction.
The structure has proven its strength to go up to three floors with the support of brick
columns.
With this technique there is reduction in cost of the wall by 25% as with conventional
English bond (9” thick wall) 350 bricks are required per cu. M whereas in Rat-trap bond only
280 bricks are required and also the reduced number of joints reduces the mortar
consumption.
Brick Jali –
o The common burnt brick is one of man’s great inventions. All over the world, with only a
few exceptions, nearly all bricks are roughly the same shape and size – that is about 9 x
4.5 x 3 inches.
o In many of these situations listed above a “Jali” is just as effective far from being a lot
more costly than the basic wall, if made of brick it can be less costly than the house wall.
 Instead of Using regular walling system
of lintel and window system, jali work
can help cost estimation.

Climate consideration and use of local

materials helps maintaining economy
than the general RCC practice.

More Methods –
Soil cement block technology – This method of construction of wall is by soil cement blocks
in place of burnt bricks masonry. It is an energy efficient method of construction where soil
mixed with 5% and above cement and pressed in hand operated machine and cured well
and then used in the masonry. The overall economy that could be achieved with the soil
cement technology is about 15 to 20% compared to conventional method of construction.
Concrete block walling – In view of high energy consumption by burnt brick. It is suggested
to use concrete block (block hollow and solid) which consumes about only 1/3 of the energy
of the burnt bricks in its production. Concrete block masonry saves mortar consumption,
speedy construction of wall resulting in higher output of labor, plastering can be avoided
thereby an overall saving of 10 to 25% can be achieved.
Roofs –
o Domes and vaults in brick or stabilized mud block with appropriate mortar.
o Upgraded thatch roof on appropriate frame work.
o Pre-cast RCC “L” panel
o Precast RCC cored units in M15 concrete.
o Precast RCC channel units in M15 concrete
o Precast waffle units in M15 concrete
o Burnt clay tube roofing in vault form.

Roofs / Intermediate slabs –

o Filler Slabs
o Partly precast RCC planks and joist in M15 concrete.
o Partly precast RCC joist and brick panels
o Partly precast RCC in hollow concrete blocks
o Thin RCC ribbed slabs
o Ferrocement channels
o Brick funicular shell on edge beam
o Bamboo reinforced concrete
o Brick funicular shells with RCC edge beams
o Brick jack arched over RCC joist
o Precast RCC cored units in M15 concrete
o Precast RCC channel units in M15 concrete

Ferro Cement Channel/ Shell Unit –

Provide an economic solution to RCC slab by providing 30 to 40% cost reduction on
floor/roof unit over RCC slabs without compromising the strength. These being precast,
construction is speedy, economical due to avoidance of shuttering and facilitate quality
control.
Jack Arch Roof/ floor –
They are easy to construct, save on cement and steel, are more appropriate in hot climates.
These can be constructed using compressed earth blocks also as alternative to bricks for
further economy.
Filler Slab Technique –
The filler slab is based on the principle that for roofs which are simply supported, the upper
part of the slab is subjected to compressive forces and the lower part of the slab experience
tensile forces. Concrete is very good in withstanding compressive forces and steel bears the
load due to tensile forces. Thus, the lower tensile region of the slab does not need any
concrete except for holding the steel reinforcements together.
Therefore, in a conventional RCC slab lot of concrete is wasted and it needs extra
reinforcement due to added load of the concrete which can otherwise be replaced by low-
cost and light weight filler materials, which will reduce the dead weight as well as the cost of
the slab to 25% (as 40% less steel is used and 30% less concrete)

Benefits –
Saving on cost – The savings on cost can be from 15 percent to 25 per cent. But designing a
filler slab requires a structural engineer to determine the spacing between the
reinforcement bars.
Thermal Insulation – The air pocket formed by the contours of the tiles makes an excellent
thermal insulation layer.
The design integrity of a filler slab involves careful planning taking into account the negative
zones and reinforcement areas.
Spanning elements for openings –
Bricks arches – Flat, semi circular and segmented
Precast thin lintel and lintel cum chajja
Brick arch with sand stone chajja

Door cum Window frames –

Ferro cement chajjas
Precast RCC frames with wood insert
Resin bonded saw dust frame
Polyvinyl chloride frame
Fiber reinforced plastic frame

More Methods –
Doors and windows – It is suggested not to use wood for doors and windows and in its
place concrete or steel section frames shall be used for achieving saving in cost up to 30 to
40%. Similarly for shutters commercially available block boards, fiber or wooden practical
boards etc. shall be used for reducing the cost by about 25.
Lintels and Chajjas – The traditional R.C.C lintels which are costly can be replaced by brick
arches for small spans and save construction cost up to 30 to 40% over the traditional
method of construction.
Door Panels –
o Plantation timber styles with particle board inserts.
o Medium density fiber board doors.
o Cement bonded particle board
o Plantation timber style with rice husk board inserts
o Red mud polymer panel doors.
o Ferrocement doors
o Polyvinyl chloride doors panels.

High Density Fiber board doors

 CONSTRUCTION INDUSTRY

Current scenario of the Indian construction industry in 2021 –

The Indian Construction industry is categorized by Commercial Constructions, Residential
Constructions, Industrial Constructions, Infrastructure, Transportation Constructions, and
Energy and Utility Constructions.
The infrastructure sector is a crucial driver for the Indian economy. The industry is highly
responsible for propelling India’s overall development and enjoys intense focus from the
Government for initiating policies that would ensure the country’s time-bound creation of
world-class infrastructure.
The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure
development.

Market Size –

India is expected to become the world’s third-largest construction market by 2022.

Moreover, the industry employs more than 40 million people and has a large pool of low-

cost workers. Besides, various governmental flagship programs like ‘Smart Cities’, ‘Housing

for All’, ‘Make in India’ and ‘Atal Mission for Urban Rejuvenation and Transformation’

(AMRUT) will further drive growth. Owing to these efforts and government’s will to increase

public private partnerships with foreign companies, it is expected to attract more foreign

investment.

Market Statistics –

o The construction industry GVA share accounts for 7.3% in FY18.

o Share of infrastructure spending in the construction sector as a part of India’s GDP rose
to 9% in 2017.
o India stands as the second largest employer, employing more than 49 million people in
the sector.
o The Indian real estate sector is expected to reach a market size of $ 180 billion by 2020.
o The Construction industry is expected to record a CAGR of 15.7% to reach $ 738.5 billion
by 2022.
o Foreign Direct Investment (FDI) received in the Construction Development sector
(townships, housing, built-up infrastructure and construction development projects)
from April 2000 to March 2019 stands at US$ 25.05 billion.
o Institutional investments in Indian realty touch $ 4 billion in 2018.
o Construction output is expected to grow on average by 7.1% each year.
o Growth Drivers –

o Population growth, urbanization,

industrialization and rise in disposable
income are key growth drivers of the
industry.
o It is expected to be the world’s 3rd largest
construction market by 2025.
o 100% FDI under the automatic route is
allowed in the construction development
sector.
o Cement capacity addition of 80-100 MT per
annum is expected over the next five years.
o The government has made tremendous
efforts to improve residential and transport
infrastructure.

Agencies Involved –

1. Housing and Urban Development Corporation ltd.

2. Ministry of Drinking Water and Sanitation
3. Ministry of Housing and Urban Affairs
4. Ministry of Rural Development
5. National Building Construction Corporation (NBCC) Ltd.

Investment Opportunities –
Key Highlights from Union Budget 2020-21

• Total allocation to the Ministry of Housing and Urban Development stands at

INR 50,039 cr.
• Total budget allocation towards major centrally sponsored schemes is as
follows:
o Pradhan Mantri Awas Yojana (PMUY): INR 27,500 cr.
o Urban Rejuvenation Mission (AMRUT and Smart Cities Mission): INR
13,750 cr.
o Swachh Bharat Mission (Urban): INR 2,300 cr.
 o Swachh Bharat Mission (Gramin): INR 9,994 cr.
Central sector schemes providing financial assistance

• Atmanirbhar Bharat Schemes

o Affordable Rental Housing Complexes (ARHCs): In order to cater to
the housing needs for migrant workers which arose due to the
COVID-19 pandemic, the Ministry of Housing & Urban Affairs has
initiated the Affordable Rental Housing Complexes (ARHCs) scheme.
It is a sub-scheme under Pradhan Mantri AWAS Yojana- Urban
(PMAY-U) that will ensure a decent living environment to migrant
workers in urban cities.
o PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi): To provide
financial assistance to various street vendors hit by the COVID-19
pandemic, the Ministry of Housing & Urban Affairs has launched the
PM SVANidhi scheme. The scheme will provide working capital to
street vendors, incentivize regular repayments and reward digital
transactions.

• North Eastern Region Urban Development Programme (NERUDP): The central

sector programme is being implemented by the Ministry of Urban
Development (MoUD). Financial aid (70% of the cost) is being provided by the
Asian Development Bank in the form of loan to the government f or
development of infrastructure in north eastern cities.

Projects –
Smart Cities Mission –

• The objective of the Smart Cities Mission is to promote cities that provide core
infrastructure and give a decent quality of life to their citizens, a clean and
sustainable environment and the application of ‘Smart’ solutions .10
• 2,781 projects worth INR 48,150 cr have been completed under Smart Cities
Mission.
• The core infrastructure elements in a smart city would include: 11
o Adequate water supply
o Assured electricity supply
o Sanitation, including solid waste management
o Efficient urban mobility and public transport
o Affordable housing, especially for the poor
o Robust IT connectivity and digitalization
 o Good governance, especially e-Governance and citizen participation
o Sustainable environment
o Safety and security of citizens, particularly women, children and the
elderly
o Health and education
• Global Housing Technology Challenge-India (GHTC-I) aims to bring the most
innovative construction technologies to India through a competitive platform.
It aims to give a boost through the development of domestic technological
research, and building platforms for knowledge sharing and networking across
the sector.12
• Of the total proposed projects under SCM, 5,924 projects (115% by number)
worth INR 1,78,500 cr (87% by value) have been tendered so far, work orders
have been issued for 5,236 projects (101% by number) worth INR1,46,125 cr
(71% by value). 2,665 projects (52% by number) worth INR 45,080 cr (22% by
value) have also been fully completed and are operational (as on 23 June
2021).
Swachh Bharat Mission –

• The Swachh Bharat Mission (SBM) is a cleanliness campaign by the

Government of India. 14
• The objectives of the SBM are:
o Elimination of open defecation
o Eradication of Manual Scavenging
o Modern and Scientific Municipal Solid Waste Management
o To effect behavioral change regarding healthy sanitation practices
o Generate awareness about sanitation and its linkage with public
health
o Capacity augmentation for Urban Local Bodies (ULBs)
o Create an enabling environment for private sector participation in
Capex (capital expenditure) and Opex (operation and
maintenance). 15
• The SBM has been divided into two categories – Urban and Gramin (rural). The
Ministry of Housing and Urban Affairs implements it in urban areas and the
Ministry of Drinking Water and Sanitation implements it in rural areas. The
above-mentioned ministries work with all other union ministries, state
governments, local institutions, NGOs, faith organizations, media and other
stakeholders to ensure the wide and proper implementation of the SBM . 16
• Rural sanitation coverage has increased from 38.7% in 2014 to 9 6.9% as of 5
December 2018.17 On the urban front, 3,574 cities have been declared
 defection free, 5.4 mn plus individual toilets have been constructed, 464,250
community & public toilets have been constructed and 88.4 MW of waste has
been converted to energy.18
• In a big boost to the SBM (Gramin), the World Bank, in December 2015,
approved a USD 1.5 Bn loan for the SBM Support Operation project. The World
Bank is also providing parallel assistance of USD 25 Mn as technical assistance
to build the capacity of select state governments in implementing community-
led behavioural change programmes targeting social norms to help ensure
widespread usage of toilets by rural households.19
Heritage City Development and Augmentation Yojana (HRIDAY) –

• The National Heritage City Development and Augmentation Yojana (HRIDAY)

has been launched to preserve and revitalise the soul of Indian heritage cities
to reflect the city’s unique character by encouraging aesthetically appealing,
accessible, informative and a secure environment.12 cities have been
identified to implement the program – Amjer, Amaravati, Amritsar, Badami,
Dwaraka, Gaya, Kancheepuram, Mathura, Puri, Varanasi, Velankanni and
Warangal. 20
• As of December 2018, 20 projects amounting to USD 20 Mn have been
completed in in Ajmer, Amaravati, Amritsar, Badami, Dwaraka, Puri and
Varanasi.22 For more details, please refer to HRIDAY.
• GST Regime Implications - Under the GST regime (revised), promoters are to
pay 1% (without input tax credit) GST in case of affordable houses and 5%
(without input tax credit) on construction of houses other than affordable
houses. 23 Commercial properties will continue at the same GST rate of 12%
with input tax credit.
• GST is not applicable to completed and ready-to-move-in projects, as there
are no indirect taxes applicable in the sale of such properties.
• The Real Estate Regulation and Development Act (RERA), 2016, set up in
November 2016, aims to reform the real estate sector in India by encouraging
greater transparency, citizen centricity, accountability and financial
discipline.24 The act will also protect consumers by creating an online system
for information sharing so that mutual trust can develop between developer s
and buyers and facilitate the timely completion of projects.
Pradhan Mantri Awas Yojana (Urban – Housing for All) –

• The Pradhan Mantra Awas Yojana (PMAY) aims to provide housing for all by
2022 and is being implemented from June 2015.
• So far, about 1.12 cr houses have been sanctioned for its beneficiaries, out of
which more than 83 lakh houses are grounded and more than 50 lakh
completed.
 • The houses sanctioned so far under the Mission involve an investment of INR
7.35 lakh cr with Central Assistance of INR 1.81 lakh cr.
• As of now, over INR 100,000 cr of Central Assistance has already been
released. Affordable Housing Fund INR 20,000 cr are being utilized in the last 3
years.
• Around 18,500 ANGIKAAR Resource Persons were trained by about 2,200
specialists of City Level Technical Cells (CLTCs) working in 4,427 cities of PMAY
(U). They acted as foot soldiers and helped propagate the message of the
campaign.
Atal Mission for Rejuvenation and Urban Transformation (AMRUT) –

• The purpose of the Atal Mission for Rejuvenation and Urban Transformation
(AMRUT) is to:
o Ensure that every household has access to a tap with an assured
supply of water and a sewerage connection
o Increase the amenity value of cities by developing greenery and
well-maintained open spaces (e.g., parks)
o Reduce pollution by switching to public transport or constructing
facilities for non-motorized transport
• Overall Mission allocation is INR 1 lakh cr including a central share of INR
50,000 cr. State action plans amounting to INR 77,640 cr for basic
infrastructure projects were approved, against which projects worth INR
79,772 cr have been grounded.
• So far, work worth INR 52,477 cr (66%) has been carried out. So far, 105 lakh
household water tap connections and 78 lakh sewer/ septage connections
have been provided under Mission and in convergence with other schemes.
Credit rating work has been awarded for 485 cities and completed in 470
cities. 164 cities have received an Investible Grade Rating (IGR), including 36
cities with ratings of A- or above. Ten ULBs namely Ahmedabad, Amravati,
Bhopal, Ghaziabad, Hyderabad, Indore, Lucknow Pune, Surat and
Visakhapatnam have raised INR 3,840 cr through the issuance of municipal
bonds.
•

Under AMRUT, 1,831 parks over 3,700 acres have been developed, and 85 lakh
street lights have been replaced, resulting in energy savings of 185.33 crore
units (kWh).

Under the Pradhan Mantri Gram Sadak Yojana (PMGSY), in October 2020, a total of
355 roads works of 2267km and 71 bridges works have been completed under
various verticles of PMGSY. 40
Reference – https://www.maiervidorno.com/construction-sector/

https://www.makeinindia.com/sector/construction

https://www.slideshare.net/AnojanKanagarathnam/construction-industry-69763990