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July, 2012


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. Roads in India are the most preferred mode of transportation. The development of road or highway fosters inclusive growth. Currently, India has the world's second largest road system, with 4.1 million km of roads, of which National Highway Authority of India's (NHAI) share is 71,722 km.

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.

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.

Sector Structure/ Market Size

The Union Budget 2012-13 is a pragmatic and growth-oriented one. Infrastructure sector has been given due thrust in the budget. The budget has doubled the infrastructure tax-free bond amount to Rs 60,000 crore (US$ 10.88 billion) and 8,800 km highway coverage target, as per C S Verma, Chairman, SAIL.

The NHAI has completed the projects of 491 km roads in Haryana, 357 km roads in Punjab and 5 km in Himachal Pradesh, as per Dr Joshi. The projects under implementation are 969 km of Rs 5,962 crore (US$ 1.81 billion) in Haryana, 645 km in Punjab worth Rs 4,791 crore (US$ 869.04 million) and 124 km of Rs 1,994 crore (US$ 361.69 million) in Himachal Pradesh.

Foreign direct investment (FDI) received in the sector construction activities (including roads and highways) during April 2011 to March 2012 stood at US$ 2,796 million, according to statistics released by Department of Industrial Policy and Promotion (DIPP).

Growth Potential

As India sought to expedite its infrastructural projects in Myanmar, Dr Manmohan Singh, Prime Minister of India and Mr U Thein Sein, President of Republic of the Union of Myanmar, have set the deadline for completing the trilateral road connectivity, to Thailand from India via Myanmar, by 2016. India would undertake the repair of 71 bridges on the Tamu-Kalewa Friendship Road.

Dr C P Joshi, the Union Minister for Road Transport & Highways and Denis Label, Minister of Transport, Infrastructure and Communication, Government of Canada, have signed a memorandum of understanding (MoU) between India and Canada. The MoU will facilitate sharing and exchange of knowledge and technical expertise in the areas of infrastructure development, operation and maintenance of roads and Intelligent Transport System (ITS) etc. India's plans for development and modernisation of national highways and expressways requiring an investment of about US$ 1 trillion was highlighted by Dr Joshi, while addressing the "First Plenary Session of the 15th Annual Conference organised by the ITS-Canada and the Indo-Canada Business Council" on the theme 'Transportation in Transition towards a new Digital Economy' in Cubec, Canada.

Private Sector Investments

  • RInfra has commenced the operation of its sixth road project worth Rs 800 crore (US$ 145.11 million) entailing four laning of Gurgaon - Faridabad and two laning of Ballabhgarh - Sohna road. The Gurgaon- Faridabad corridor connects major tourist destinations, industrial zones, corporate offices and the International IGI Airport- Terminal 3 (T3) of Delhi. This 66 km long corridor includes Gurgaon-Faridabad, Ballabhgarh-Sohna, Pali Bakri and Surajkund road
  • Essar Oil and Larsen and Toubro Ltd (L&T) have signed MoU for supplies of high quality bitumen for key infrastructure projects in Gujarat undertaken by L&T. The initial supply agreement is for 15,000 metric tonnes (MT) over the course of the projects. Essar Oil has existing relationship with L&T under which it supplied about 60,000 MT of high quality bitumen over the last 18 months for L&T's various road projects