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January, 2012


In a country as large as India, roads and highways are the arterial lifelines of economic growth. As the road network expands, opportunities for the automotive sector too rise concomitantly across the domains of passenger vehicles of all sizes, commercial vehicles, and auto parts, according to Dr C P Joshi, the Union Minister of Road Transport and Highways.

In the development process, connectivity is a key component. It is the pillar on which economy grows and development is witnessed. Roads and highways not only connect different production and consumption regions but also open up new markets by gaining access to new consumers.

Road or highway development fosters inclusive growth. It promotes overall development of the region, provides direct/indirect employment to skilled/semi-skilled and even unskilled workers all along the region served by the highway, highlighted Dr C P Joshi, Union Minister of Road Transport and Highways, at Pravasi Bhartiya Divas 2012 in Jaipur.

The immediate net benefits of the upgraded highway mostly relate to improvement in granting access to various work and educational opportunities. Roads in India are the most preferred mode of transportation. Easy availability, adaptability to individual needs and cost savings are some of the factors working in favour of road transport. It is for this reason the rural economy is so dependent on the infrastructure component.

Currently, India has the world's second largest road system, with 41,00,000 km of roads. About 60 per cent of freight and 87 per cent of passenger traffic passes on roads. Although National Highways (NH) constitutes only about 1.7 per cent of the road network, they carry 40 per cent of the total road traffic.

The length of various categories of roads is: National Highways - 70,934 km, State Highways - 1,54,522 km, Major District Roads & Other District Roads - 25,77,396 km, Rural Roads - 14,33,577 km.

Sector Structure/ Market Size

India's construction sector is expected to grow at about 35 per cent between 2008–09 and 2012–13. The private sector is expected to contribute 44 per cent of the total projected spend of US$ 100 billion on roads and highways over the Twelfth Five Year Plan (2012-17) period.

According to estimates, the road sector in India will require investments in the range of US$ 75-90 billion over the next five years.

NHAI has received record premiums in 2011. In fact 20 projects out of 28 been awarded till November 2011 in the current fiscal fetched premium of about Rs 2,146 crores (US$ 408.61 million).

The NHAI has fixed the targets for construction of NH in the country. For 2011-12, a target of 2,500 km has been set of which 823 km (upto October 2011) has been achieved.

Foreign direct investment (FDI) received in the sector construction activities (includingroads and highways) during April 2000 to December 2011 stood at US$ 10.24 billion, according to data released by Department of Industrial Policyand Promotion (DIPP).