The construction industry is facing its toughest downturn since the global financial crisis.
Lodha, the world’s largest commercial catering company, has laid off 7,000 workers, according to the company.
But the construction industry has grown in India over the past decade, and is now the fastest-growing in the world, according the World Bank.
The country has a growing number of foreign investors and is expected to overtake the United States as the world market for the construction and construction related industries will grow to $4 trillion by 2020, according McKinsey & Co. India is also poised to become the world capital of construction by 2020.
But for now, many in the construction business are worried about what will happen if the government fails to provide a financial cushion to the sector.
“It will be difficult for us to continue operating, and the government will be faced with many financial challenges, especially with the government’s inability to fund projects,” said Vicky Mallya, chief executive officer of Lodha.
“It is a huge concern that there will be an interruption in the development of the sector.”
In recent years, the construction sector has been plagued by bad loans and debt that has left the sector with little money to repay.
This year, the government announced a loan of about $3 billion to the construction giant to help it pay off its debts.
Construction companies have been struggling to make their loans, which have ballooned by $200 billion since 2010.
The government said it would increase the lending to $6 billion, but many are concerned that the money will not be enough to meet its debt.
In March, Lodha said it will have to write off $250 million of debt due to bad loans, including $150 million in bad loans made to its subsidiaries.
The company has also been hit by high debt repayments, which led to its default last year.
A total of $1.3 billion in debt is owed to government entities and companies in the country.
Construction giant Sibco, which operates construction projects, said that the company will need to write down $500 million of loans, with a further $1 billion of debt owing to lenders.
“We expect to pay off some of these debt in the near future,” said Rajesh Kumar, senior vice president and managing director at SibCo.
“The lenders have put in some collateral.”
The construction sector is also in the spotlight as the government plans to expand the railway sector.
According to estimates by the World Trade Organization, India’s construction sector accounts for $1 trillion worth of exports and $4.3 trillion of imports.
In the last year alone, the country exported about $50 billion worth of goods and services.