India has the second largest road network in the world (4.2 million kilometres). Roads bear 87.4 per cent of the country’s passenger traffic and 60 per cent of freight traffic.
The road network in India is sub-divided into four categories: National highways; State highways; Major & other district roads and Rural and other roads constituting of 1.7, 3.6, 60.8 and 33.8 per cent respectively. The total length of national highways is 70,934 kilometres and carries 40 per cent of the country’s road traffic.
With the Government of India permitting 100 per cent FDI in the roads sector, most foreign companies have formed partnerships with Indian players to participate in the sector’s growth story.
Government policy to increase private sector participation has proved to be a boon to the infrastructure industry with a large number of private players entering the business through the PPP model. There are two types of PPP models used in road projects, BOT toll and BOT annuity.
The Government has hence made infrastructure development a key policy issue and plans to spend US$ 500 billion on infrastructure in the 11th Five-Year Plan and the spending is estimated to double to US$ 1 trillion in the 12th Five-Year Plan.
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