Sale of construction equipment expected to rise 15% this year
The construction equipment sale is expected to grow to a record high of around 10-15% in 2017, driven by the government’s push on infrastructure building. Sales of equipments such as backhoe loaders, excavators, earth moving machines and pick-n0carry cranes had peaked in 2011 at 52,500 units.
The industry executives said that the growth expected in the segment this year will come despite a 6-8% increase in the prices of construction machines under the goods and services tax regime. These equipments previously attracted an excise duty of 12.5%, plus state taxes that ranged from 6% to 13.5%. Together, the tax incidence was 26% at the most. It is now 28%. With the government looking at investing in smart cities as well as developing infrastructure projects such as highways, inland waterways, railways and regional airports, experts expect growth in the sector to gain further momentum in the next three to five years.
According to data available with the Indian Construction Equipment Manufacturers’ Association, sales of construction equipment declined for three straight years before rising 2.5% to 36,800 units in 2015 and 41.5% the year after, to 52,100 units.