Last few years have seen an unprecedented hike in the prices of construction material. For the first time in the history of the country, the prices of steel rods have increased to Rs52,000 per ton.

Similarly, the prices of gravel, sand, crush and charcoal, too, have increased by up to 30 per cent. The prices of cement also have increased significantly. This increase in the prices of construction material has led to delay and suspension of construction activity and development projects.

This price spiral has put many mega construction projects in limbo, and has negatively affected the purchase of construction material. This has in turn put the jobs of those associated with the industry in jeopardy. The increase in the price of steel rod has also lead to artificial crisis of the commodity.

Charcoal is another important construction material. One drum of charcoal that used to cost Rs6,200 some months back, now costs Rs9,000. The increase has been attributed to the increase in import taxes on charcoal and the withdrawal of subsidy by the government.

The increase in the prices of construction material has also lead to decrease in the quality of construction work being done.

A comparison of the prices of bricks, gravel, sand, crush, and cement in the local market with that of the government announced schedule of rates reveals upsetting facts.

The gap between the local market prices and that of the government announced rates (that are very low) provides an incentive to the contractors to play foul. The effects of increase in prices of construction material can be seen across the country with the deteriorating standards of construction. Many of the newly-constructed buildings and roads began to crumble soon after they were commissioned. This deterioration costs millions in terms of losses to the government.

Poor standard of construction has become a reality in the construction of commercial and private buildings and no one can take eyes off this fact. Of the many reasons regarding the poor construction of government buildings, delay in release of funds is one important reason.
 
Non-provision of required amount by the investors in case of construction of commercial as well as private buildings results in faulty construction. All this is negatively affecting the standard of construction.

Contractors claim that 30 per cent of the payment meant for them is pocketed in the name of ‘commission’ by the government officers concerned. In addition to this, 6 per cent of the total payments made to the contractors is deducted as income tax.

In some government departments, the accumulated rate of income tax and commission has reached 38-40 per cent. That is the reason that of the total cost, just 60 per cent of the amount is spent on construction that results in poor standard of construction.

Steel rods, gravel, sand, stones and cement are the basic ingredients of the cement industry. The increase in their prices directly dents the construction industry and the quality of construction.
Similarly, in the government constructions just 50 per cent of the total amount is spent on construction.

It is imperative that the government takes steps to remove the obstacles in the way of development of the construction industry. Any further delay will break the back of the poor labour class that is associated with the sector and will adversely affect economy on the whole.