Rural Construction Employment Boom during 2000–12

Amid (near) jobless economic growth during 2000–12, construction employment boomed at over 9% annually. It was part of a 10 percentage point rise in fixed capital formation rate in 13 years, to 35% of gross domestic product. The boom was rural, growing 2.5 times (at over 12%) as fast as in urban areas (at a mere 5%). National Sample Survey Office primary data reveals that a rise in rural private residential construction is the principal factor explaining the boom. This suggests improvements in rural housing status: conversion of kutcha houses into pucca houses. Decline in price-to-income ratio—of cement to rural wages—expanded rural construction demand. The popular perception (or explanation) for the rural construction employment boom in terms of rural–urban migration—of short-term, circular or seasonal—does not hold water.