The National Statistics Office (NSO) has released a first-of-its-kind pilot study to track the "hidden" side of India’s construction sector. While large infrastructure projects are well-documented, this report focuses on construction done by households themselves and by small, unincorporated agencies. Covering the period from July to December 2025, the study reveals that nearly 98.5 lakh households managed their own construction projects during this window.
A standout finding is how these projects are funded: 97% of households relied on their own income, which covered over three-quarters of all costs. Interestingly, rural households were more likely to use bank loans for building than those in cities.
For small construction agencies, the study highlights their role as major employers, with each establishment hiring about 5 workers on average. This data is critical for the government to accurately measure India’s GDP and understand the real size of the informal building economy.
Insights into Household and Agency Activities
Household Sourcing: Families spent 75% of their budget on materials like bricks, cement, and steel, while labor accounted for 22%. On average, a household hired about 4 laborers to get the job done.
Rural vs. Urban Credit: Institutional loans supported 23% of rural construction projects but only 13% in urban areas, suggesting better penetration of rural housing finance.
Small Agency Economics: There are roughly 10.27 lakh small construction agencies active in India. These "market establishments" produce an average output of ₹16.25 lakh each.
Employment Impact: These small agencies are a massive source of work, employing significantly more people per unit in urban areas (5.5 workers) than in rural areas (4.5 workers).
Expenditure Rules: For the purpose of this study, construction was only counted if it crossed certain cost thresholds, such as ₹10,000 for rural homes and ₹20,000 for urban ones.
What is an "Unincorporated Construction Agency"?
An Unincorporated Construction Agency is a small-scale building business that is not registered as a separate legal company, such as a local contractor or a family-run masonry unit. It matters because these agencies handle the bulk of residential and local commercial building in India but often fly under the radar of official economic data. This study helps move these businesses from "invisible contributors" to "measurable economic actors," showing that they own average assets worth ₹5.21 lakh and generate significant Value Added (GVA) for the country. For MoSPI, tracking these agencies is essential to see how small-scale investment is driving the national economy.
Policy Relevance
Fixes Gaps in National Accounting: By capturing "own-account" construction, the government can now provide a much more accurate picture of capital formation in the National Accounts Statistics.
Guides Housing Finance Policy: Since 77% of construction is still funded by personal savings, there is a massive opportunity for banks to design better loan products for middle- and low-income builders.
Supports Labor Welfare Planning: The data shows that small agencies and households hire millions of workers; this helps the Ministry of Labour plan better social security coverage for these informal workers.
Informs Raw Material Demand Projections: Since materials like cement and steel make up 60% of household building costs, industrial planners can use this data to forecast demand in the residential sector more accurately.
Follow the Full Report Here: MoSPI Press Note on Construction Pilot Study