Roads are a major mode of transportation in India today, as they carry almost 90 per cent of the country's passenger traffic and about 65 per cent of its freight. The density of India's 80, 000 km-national highway (NH) network is 0.66 km of highway per square kilometre of land. It is encompassed by over 200 toll plazas, about half of which are handled by various highway developers and the rest by National Highway Authority of India (NHAI).
The Indian Government also plays a vital role in developing the road network in the country. It provides various incentives for private and foreign sector investment in the roads sector apart from allowing 100 per cent foreign direct investment (FDI) under the automatic route for support services to land transport such as operation of highway bridges, toll roads, and vehicular tunnels. Such services also include services incidental to transport such as cargo handling, construction and maintenance of roads, bridges; and construction and maintenance of roads and highways offered on build-operate-transfer (BOT) basis, including collection of toll.
Road development does not only talk about urban space, but is also very important for the growth of rural India. Budget 2013-14 has provided a renewed thrust to rural India. The allocation to rural development is higher by nearly 50 per cent with a focus on improving road infrastructure. Rural income should witness a rise in the coming years with road construction activity picking up.
The rapid expansion and strengthening is also very imperative because of increasing motorisation. The number of vehicles has been growing at an average pace of around 10 per cent per annum. In addition to it, the share of road traffic in total traffic has grown from 13.8 per cent of freight traffic and 15.4 per cent of passenger traffic in 1950-51 to an estimated 62.9 per cent of freight traffic and 90.2 per cent of passenger traffic by the end of 2009-10. Thus, road transport is a segment that needs continuous up-gradation and regulation for both present and future traffic and for better energy efficiency, less pollution and enhanced road safety.
Foreign direct investment (FDI) received in construction development sector from April 2000 to January 2013 stood at US$ 21.95 billion, according to Department of Industrial Policy and Promotion (DIPP).