With the largest road network in the world, the Indian roads sector has evolved with a strong base for major players. Roads are the most preferred mode of transportation and account for 85 per cent of passenger traffic and 65 per cent of freight traffic in India. In the past five years, the number of vehicles in the country has increased at an average rate of 10.16 per cent per annum. This has necessitated the need for better quality roads.
Broadly, the road network in India is divided into the primary (the National Highways) and secondary system (the State Highways and major district roads). In addition, the network comprises expressways and rural and other roads. The National Highways account for only 2 per cent of the total road length and carry 40 per cent of the total road traffic.
The Government of India (GoI) has permitted 100 per cent FDI in the roads sector and has also provided tax exemptions and duty-free import of road construction equipment and machinery. The State Highways and major district roads (MDRs) carry 40 per cent of the total road traffic and constitute 13 per cent of the total road length. The government has launched the national highways development programme (NHDP) to improve and develop the National Highways in the country.
The Eleventh Five Year Plan (2007–2012) has projected an investment requirement of US$ 8,613.95 million (INR 413,470 million) in rural roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY).Sectoral Presentation (April 2010)
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