Impact of Covid-19 on Construction Sector

The government needs to come out with comprehensive roadmap to prop up the sector, writes Sunil Ladwa.

Undeniably, the pandemic has wrought havoc on the entire gamut of economic wheel without any exception rendering severe blow to sectors across sectors that were already reeling under the weight of slowdown.  Less said the better about the construction sector whose robustness is not only critical to the functioning of the economy but also essaying buffering role to many concomitant industries as well.

Architecture, design, engineering, steel, cement, real estate, finance, legal, transportation, HR and the government guidelines existing as well as from time to time subsequent issues constitutes larger bouquet governing the construction sector. It needs no further assertion in emphasizing that the nation building is heavily dependent on the health of this extremely crucial vertical. Not only in terms of generating huge job opportunities to millions of workforce from these allied sectors -both white and blue collar - but also majorly aiding in the task of nation building.          

Covid - 19 though appears to have further derailed the already slow chugging sector considerably. Enforced lockdown measures have rendered complete closure of human activities that forms the most vital component viz. workers / labourers.  Scores of migrant laborers have left to their natives and bringing back humongous workforce of that magnitude would prove to be one big hurdle for sure. Nation is helplessly witness to the travails of migrant laborers post lockdown.               

As regards supply chain, unless manufacturing industries commences operation full throttle, production and supply of steel and cement would be largely functioning at less than half tilt.  Of course, sourcing of adequate quantity of raw materials - a greater challenge in itself - would precede plans to operationalize production pipeline. Further, addressing unemployment conundrum is also set to pose equally big headache to the sector apart from those mentioned herewith.              

What should the industry expect from the government in the days ahead? Speaking from the sector's perspective, staggered lifting of lockdown should be organically initiated necessitating the gradual clawing back. Facilitating smooth movement of men and materials are of foremost requirements to start rolling. Finance shall be another critical area requiring sympathetic handholding from the lending agencies.  Banks may explore possibilities of easing the burden by reducing interest rates on borrowing as well as relaxing payback terms.

The government should form a core group of committee consisting of established industry leaders as well as experts from the field to come out with comprehensive roadmap to prop up the sector. Fiscally prudent sops and stimulus packages should be naturally forthcoming that will keep the realtors of all hues interested in their contemplated endeavors. Marginal players will be affected though.                 

Easing of CSR norms are imperative under the circumstances and any insistence to continue in its present form would invite further strain on the tottering sector.  As balance sheets of realtors are bound to be severely impacted, CSR funds could be allowed to be diverted to shore up the organization's pressing needs. Pumping in the funds to strengthen construction related activities on the ground should be foremost in the plan of action.            

90% of our workforce is unorganized where majority is represented in the construction sector.  Labor reforms envisaged would have to wait to see the day of light. As the sector tries to regroup, we may foresee greater demand for construction laborers leading to increased pressure on the already thin margins.  Ultimately, we all need to hope and pray things will ease out sooner than later.

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