Elusive economics

Construction has grown over the years, yet there is no official figure on how much sand the country requires or produces

Photo: Sayantan Bera

India has the world’s third largest construction business after China and the US. Malls, houses, offices and flyovers have sprung all over. The 12th Five Year Plan projects an investment of 10 per cent of the national GDP, or Rs 45 trillion, in infrastructure. Is the massive scale of sand mining that India has seen in the past few years a direct consequence of its growth?

Mumbai-based construction industry expert Amit Rampure explains: in 2010, investment in the construction sector contributed eight per cent to the GDP. Every one rupee investment in the construction industry for manufacturing cement or for mining sand causes Rs 0.80 increment in the GDP as against Rs 0.20 and Rs 0.14 investment in the agriculture or the manufacturing industry. Economic activity in this sector generally creates 4.7 times increase in income and 7.76 times increase in employment, Rampure says in his independent report on investment in the construction industry in 2011. Despite a worldwide economic slowdown, construction in India grew by over seven per cent between 2009 and 2010. The sector’s worth is now assessed at over Rs 4,000 billion. The country produces about 250 million tonnes of cement every year. Yet, there is no official figure on the quantity of sand required or produced.

According to the Minerals Resource Book (MRB) prepared by the Indian Bureau of Mines (IBM), in 2010, production of silica sand was 2.28 million tonnes in 2009 -10. “Production decreased from the previous year by 19 per cent due to lack of demand from cement plants and labour problems,” states the report. An IBM official told Down To Earth that the figure shows a decrease because there are no estimates of sand mined illegally. The figure was based on the information given by the state-allotted quarries and mines.

Figures released by the Union mines ministry show that sand contributes only 9.4 per cent to the total minor minerals mined in the country valued at Rs 18,734 crore. In 2009 and 2010, India ranked 12th in sand and gravel production. Andhra Pradesh (39 per cent), Gujarat (17 per cent), Rajasthan (14 per cent), Maharashtra (13 per cent) and Uttar Pradesh (7 per cent) are the leading producers of sand.

MRB states that about 62 per cent of the total sand production was from 15 silica sand mines and two associated mines that also produce other minor minerals. These mines have the capacity to produce more than 50,000 tonnes annually. Thirty-three per cent came from 56 sand mines and one associated mine, each producing between 5,000 and 50,000 tonnes. The remaining five per cent of the output was contributed by 62 sand mines each producing less than 5,000 tonnes annually.

An analysis of the cement consumption pattern is essential to determine the demand for sand. Concrete is the largest synthesised material which has a per capita consumption of 1.5 tonnes per annum in India, says S K Manjrekar, former president of the Indian chapter of American Concrete Institute. It generally comprises one part of binder (cement), two parts of aggregate (sand), four parts of additives (crushed stone, gravel) and half part water.

On an average, one person uses 200 kg of sand per year, states a report by the Centre for Techno-Economic Mineral Policy Options (C-Tempo), a society registered under the mines ministry. International Standards Organisation (ISO-14688) grades sand as fine, medium and coarse. Construction experts say that in northern India, especially the Indo-Gangetic plains, good quality sand is available in plenty. However, due to the region’s alluvial terrain coarse aggregate is scarce. This challenge manifests in the opposite form in central and southern India where availability of good quality fine aggregate is a constraint.

Mineral in short supply

Legal or illegal, sand continues to be a scarce commodity. The construction sector, mostly real estate, constantly complains of acute shortage of this minor mineral.

The realty sector was unable to build houses planned in the 10th Five Year Plan. When the 11th Five Year Plan began in 2007, there was a backlog of 24.7 million houses. By the 12th Five Year Plan, the backlog increased to 42 million units. The Union Ministry of Urban Development projected a sand shortage of 91,666.7 million tonnes by 2011-end.

The real estate sector is not limited to housing alone. Mumbai, Bengaluru and Delhi, along with their satellite towns, contribute 70 per cent of the country’s commercial space. Tier II cities—Kolkata, Chennai, Hyderabad and Pune—contribute 21 per cent of the share. Other investment-grade real estate developments in Tier III cities add nine per cent of the commercial space.

In the non-housing sector, too, there is no estimate of sand requirement. Experts with the Construction Industry Development Council say it could be twice that of the housing sector.

Under the 12th Five Year Plan, road infrastructure would require 75 million tonnes of cement and power infrastructure about 45 million tonnes. Considering the formula of mixing two parts sand into cement, road infrastructure needs about 150 million tonnes of sand and the power infrastructure about 90 million tonnes of sand.

The National Highway Development Programme (NHDP) seeks to construct 45,000 km of roads. For 2011-12, the National Highway Authority of India has awarded construction contracts for about 6,500 km under NHDP. The authority plans to award contracts for 7,300 km in 2012-13.