The construction industry is facing a survival issue and many small- and medium-sized construction firms and builders would be out of business without timely action, said Ajit Gulabchand, CMD, Hindustan Construction Company and past president of The Builders Association of India (BAI) at a webinar.
Many existing projects have got delayed due to paucity of funds, he said. Hence many projects were facing cost overruns, he added.
Painting a gloomy picture for the infrastructure, housing and construction industry, he said the governments planned expenditure of 100 lakh crore in the next five years would help this industry overcome some of the challenges.
However, he said it would be impossible for the industry to offer 30% collateral that banks were now seeking for sanctioning loans.
BAI has recommended a few measures, including on taxation and regulation for revival of the sector, to the Centre. Loans for the construction industry should be treated at par with agriculture, and regulated accordingly. GST for both infrastructure and housing projects should be 5%, said M. Mohan, President, BAI.
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