Construction is one of the most vital parts of a country’s infrastructure and industrial development. It includes houses, offices, hospitals, schools, townships and other buildings; urban infrastructure, highways, roads, railways, ports, airports; power systems; irrigation and agriculture systems; telecommunications etc.

Construction industry is one of the basic drivers of socio-economic development of country. This sector generates huge employment opportunities, and also helps other related industries grow with rapid pace. The employment in this sector not only attracts semi skilled and skilled people but also absorb unskilled workers from rural areas. At the start of this century, it had employed about 17.62 million people.

Due to fiscal constraints, Government is increasing emphasis on participation of private sector in this field and projects are being carried out in public-private partnership as well as BOT (Build – Operate – Transfer) mechanism. Also some projects undertaken by Government like NHDP (National Highway Development Programme) and PMGSY (Pradhan Mantri Gram Sadak Yojana) are providing necessary momentum to rapid growth of this industry.

The construction sector accounts for upwards of 6 per cent of GDP (gross domestic product) in any advanced economy. It accounts for about 8 per cent of the UK's GDP, 16 per cent of Ireland's and 11 per cent of Dubai's. In India Construction sector contributes to 6 percent of GDP and this contribution is going up every year.

Recently Government of India has taken an important decision liberalise norms of foreign direct investment in the construction sector. The Government has permitted 100 per cent foreign direct investment in the construction sector with the liberty to repatriate profits after a three-year period.

The minimum project size for foreign investors has also been reduced from the present norms, based on feedback from prospective investors. These decisions open up immense possibilities, not just for the real estate and construction sectors, but also for the economy as a whole.

Development of the real estate sector has not been uniform across the country. While cities such as Mumbai, Delhi, Gurgaon and Bangalore have been a realtor's paradise, others such as Chennai, Hyderabad, Kolkata and Pune have lagged. However, these cities are now fast catching up, especially Chennai and Pune, as land becomes scarce in Mumbai and prices going up quite high in Bangalore.

This sector has been dominated by small-to-medium players till date with few exceptions like DLF in Gurgaon and Hiranandani in Mumbai. But this picture is going to change in near future as foreign investors with large financial muscle are now ready to invest in developing countries like India.