This document discusses the PESTAL analysis of the construction industry in India. It outlines various political, economic, social, technological, environmental, and legal factors. Politically, the government has launched various housing schemes to promote affordable housing. Economically, construction accounts for 11% of India's GDP and FDI has been permitted in the industry. Socially, builder reputation influences home buying decisions. Technologically, use of modern techniques improves quality and productivity. Environmental factors like natural disasters can delay projects. Legally, regulations have increased for transparency.

1. PESTAL Analysis of construction industry in
India
POLITICAL FACTORS
.
1. Current government has launched 'Housing for All by 2022' scheme being
pushed by Prime Minister Narendra Modi to provide housing to urban poor.The
scheme ensures rehabilitation of slum dwellers with participation of private
developers, promotion of affordable housing for weaker section through credit-
linked subsidy, affordable housing in partnership with public and private sectors,
2. Current government introduces ‘MAKE IN INDIA’ program which in attracting
foregin
Companies and investors to invest in indian economy which is a great
opportunity for India constructive industry in future.
3. Small service providers whose aggregate value of taxable
services provided during the preceding financial year does not
exceed Rs.4,00,000 have been given an option to claim
exemption from service tax.
4. the Government has clarified in case of
construction of residential complex that service tax would be
payable only on the gross amount charged by the service
provider for the construction service provided and it would
not include the cost of land and stamp duty paid for
registration of land
5. The introduction of Real Estate Mutual fund (REMF) and Real Estate Investment
Trust (REIT) has boosted real estate investments from the small investor's aspect
ECONOMIC FACTORS
1.India is witnessing tremendous growth and expansion of construction activities and
construction is the largest component of GDP , around 11% of GDP is includes
construction industry. It has been growing at a rate over 10 % in the past few years
when GDP was around 8%
2. . the government has recently permitted 100% FDI in construction sector. Non
Resident
Indians (NRIs) are permitted to invest in Housing and Real

2. Estate sector. Further, Persons of Indian Origin (PIOs) are
also allowed to acquire residential / commercial property in INDIA
2. Changes in the demand due to factors like changes in disposable income of
perspective buyers and inflation may affect the construction industry. With the easy
availability of housing loans and tax redemption on loans the demand for houses is
increasing and thus construction is gaining weight.
3. . the government has recently permitted 100% FDI in construction sector. Non
Resident
Indians (NRIs) are permitted to invest in Housing and Real
Estate sector. Further, Persons of Indian Origin (PIOs) are
also allowed to acquire residential / commercial property in INDIA
4. NRIs are allowed to invest in the following activities:
Development of service plots and construction of built-up
residential premises.
Investment in real estate covering construction of residential
and commercial premises, business centres and offices.
Development of townships.
City and regional level urban infrastructure, including both
roads and bridges.
Investment in manufacturing of building materials, which is under open under FDI
also.
Social Factors
1.Brand name of a builder or the company plays an important role in convincing the buyer to buy the
house and be sure of the quality of construction work done. A low credibility or image can lead to
poor financial performance.
2.Currently many builders are planning and even developing ‘ Green Building Projects’.A green
building is one which uses less water, optimises energy efficiency, conserves natural resources,
generates less waste and provides healthier environmental for people
Technological Factors
1.Use of low grade technology in the construction sector leads to low value addition and
low productivity apart from sub standard quality of construction and time over runs in
projects. Due to lack of technology, construction can suffer in terms of quality and
design.

3. 2.The business of ready mix concrete in India is in getting popular among construction
companies. Indian ready mix concrete business uses only 2% of the total cement
production. The increasing use of ready mix saves time and allows better quality too.
3. Last few year many new technologies and techniques have been introduced in field
of construction as well as various trends are also seen in designs and structures.
Environmental Factors
1.Various environmental factors affect the cost of construction like avaliabilty of labour
force , distance of construction point from place of raw material which is basically
transportation cost, quality and cost of land anf demand .
2.Uncertain environmental hazards like earthquakes, floods etc. have a disastrous impact on the
construction industry and can delay construction as well.This has been witnessed during the
construction of the Metro line in the capital of India, New Delhi where one of the railway lines being
constructed collapsed due to heavy rainfall and delayed the total completion time of metro.
Legal Factors
1.Over the years, the tax, legal and commercial authorities have
become more organized and vigilant resulting in need for the
players to become effective and transparent. (e.g.
Tax registrations, corporate governance issues, disclosures as per Accounting
Standards,
auditors reviews for tax, VAT, limited review for declaration of
operating results, Companies Act etc).
2. The Finance Act, 2005 has, however, with effect from 16
June 2005, brought Construction of Residential Complex
having more than twelve residential units or apartments within
the ambit of service tax