New challenges to construction, infrastructure sector: sharp rise in prices of various raw materials

- Ubhi Bazar: Dilip Shah

- Instructions to increase construction cost by 5 to 20%: Fear of rising prices in the property market in such an environment

Recent trends in the field of infrastructure and construction in the country have seen a rapid reversal. Earlier in the year, the first wave of Corona disrupted construction in various cities of the country and in the state in the wake of the lockdown last year. However, with the completion of the first wave of the Corona and the easing of the lockdown, there was renewed activity in the construction sector. However, this optimism was short-lived as the second wave of Corona spread rapidly in the country and a new lockdown was imposed on the construction sector in the country. However, with the recent completion of the second wave of the Corona and the reopening process now underway instead of the lockdown, there have been indications of renewed activity in the construction sector. Recently, the Diwali atmosphere has seen many new deals in this field. As the deals on such properties increase, so does the registration of such deals in terms of stamp duty. The prevalence of Corona vaccination in the country has also increased rapidly and as a result, there is hope that Corona will be brought under control and this hope has also given rise to new optimism in the field of infrastructure and construction. Workers are also coming to the construction sector now. There was a shortage of such workers in the sector during the Corona era but such shortages are now being alleviated. With the increase in deals in this sector and the recent reduction in interest rates on loans provided by banks in this sector, the financial crunch in this sector has also eased.

However, in such an optimistic environment, new challenges are now facing the construction sector. Recently, cement prices have been on the rise. After the price hike in November by the paint manufacturers, now there are indications recently that the price will be increased further by the paint manufacturers in December as well. Iron and steel prices have also been on the rise recently. Workers' wage rates have also risen. A variety of new challenges are now being faced by the construction sector and the infrastructure sector, sources in the sector said. In such an environment, real estate and property market prices are expected to rise by about 10 to 15 per cent in the next six to eight months, experts said. In addition to steel and cement, copper, PVC vs. As the prices of such goods go up, there are indications that the cost of production in this sector has gone up significantly. Construction players have seen an increase in construction costs and various players in the sector are claiming that such an increase has been around 5 to 20 per cent. Sources in the Confederation of Real Estate Developers Association claim that the property market prices have remained low for the last 3 to 4 years and now an increase in market prices has become inevitable. This organization represents about 12 to 15 thousand developers in the country. Prices of cement and steel have been fluctuating for the last 10 to 12 months. The rise in global crude oil prices has had a knock-on effect on various crude oil commodities. Prices of tiles and aluminum have also gone up. Gas prices have also gone up. As construction costs rise, developers are now considering putting some of these costs on buyers. The cost of plumbing and electrical fittings has also increased. In addition to rising raw material prices, there has been a shortage of such goods. The players in the construction sector are also concerned that such raw materials are not available as required despite the high prices. Rising prices of plastics and polymers have also increased the cost of piping. In such raw materials, the government now needs to relax the structure of GST and consider exempting input tax credit, experts said.