How Technology Is Transforming The Construction Industry

The construction industry in India is increasingly using modern technology. The effect on labor has been so great that according to a report in The Hindu, from 2002 to 2012, the number of laborers required to build half a million sq. ft. fell from 700-800 to nearly 200. In a decade, automation has helped developers to build four times more with the same number of laborers.

How would home buyers benefit from use of more sophisticated machinery?

1) Machines like tower cranes and stone crushers save time and reduce the cost of construction. Tower cranes are now used in high-end residential projects. Home buyers will find their projects done on time, at a lower cost. 

2) Pre-fabricated structures are now being largely used in large construction projects. But, if pre-fabricated structures assembled in factories are used in housing projects, 1,000 sq. ft. can be built in 2-3 days according to some estimates. Snapdeal, for instance has started selling wooden prefabricated houses at a relatively low price.  The Broad Sustainable Building Co. claims to be the fastest builder in the world after erecting a 57-storey building in 19 days in China. They had spent four and a half months pre-fabricating the building's 2,736 modules.

3) Aluminum wall form work, for instance, is more durable. Apart from giving you more carpet area, it reduces turnaround time by half. By using aluminum wall form work, you could eliminate labor-intensive activities construction. 

4) Precast technology is being increasingly used by realty majors now, as it saves construction time by around 64%. By using precast technology builders will be able to finish a brick and mortar project, which normally takes around six months through conventional methods, in two months. Apart from saving time, this also improves the quality of the structures with more carpet area.

Many attribute increased mechanization in India to the shortage of unskilled construction laborers. Delays in construction are costly, and have prompted developers to embrace mechanization. But, this is not the only reason. Though mechanization cuts cost and time, developing nations tend to use primitive technology while the developed countries use more advanced technology. India has always lagged behind the developed countries in using advanced technology in construction because developers do not have enough capital to spare to acquire sophisticated machinery.

This is true in other industrial activities as well. For instance, on April 28, 2015, a parliamentary panel had recommended the government to use state-of-the-art technology in manufacturing so that the sector’s contribution to India’s gross domestic product (GDP) rises from the current 15%-16% to 25%. 

What can the Indian government do to accelerate the automation process?

1) If the government wants more mechanization, it should reduce the regulatory barriers that developers face in acquiring capital. 

2) If transaction costs like stamp duty are lowered and regulatory and taxation norms are eased, developers will have more capital to spare to be able to purchase advanced machinery. 

3) If the government increases the Floor Space Index (FSI) levels, using of expensive machinery would become more feasible. 

4) Raising the cap on Foreign Direct Investment (FDI) in the real estate sector would increase capital flow thereby enabling developers to buy more complex machinery.