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NHAI has accomplished the highest ever highway construction of 3,979 km of national highways in FY20.

Road Infrastructure in India

    Last updated on Oct, 21 2020

Indian Road Industry Report  (Size: 528.96 KB ) (September, 2020)

Introduction

India has the second largest road network in the world, spanning a total of 5.89 million kilometres (kms). This road network transports 64.5% of all goods in the country and 90% of India’s total passenger traffic uses road network to commute. Road transportation has gradually increased over the years with improvement in connectivity between cities, towns and villages in the country.

In India, sale of automobiles and movement of freight by roads is growing at a rapid rate.

Market size

Highway construction in India increased at 21.44% CAGR between FY16–FY19. In FY19, 10,855 km of highways were constructed, and the Government has set a target for constructing 12,000 km of national highways in FY20. In March 2020, NHAI (National Highways Authority of India) accomplished the highest ever highway construction of 3,979 kms.

In April 2020, the Government set a target of constructing roads worth Rs 15 lakh crore (US$ 212.80 billion) in the next two years.

Huge investments have been made in the sector with total investment increasing more than three times from Rs 51,914 crore (US$ 7.43 billion) in 2014–15 to Rs 158,839 crore (US$ 22.73 billion) in 2018–19.

The Government of India has allocated Rs 111 lakh crore (US$ 1.4 trillion) under the National Infrastructure Pipeline for FY 2019–25. The roads sector is likely to account for 18% capital expenditure over FY 2019–25

Key Investments/Developments

The Union Minister of State for Road, Transport and Shipping has stated that the Government aims to boost corporate investment in roads and shipping sector, along with introducing business-friendly strategies, that will balance profitability with effective project execution. According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), construction development^ sector attracted Foreign Direct Investment (FDI) inflow worth US$ 25.66 billion in the between April 2000 and March 2020.

Government Initiatives

Some of the recent Government initiatives are as follows:

  • In August 2020, the Government of India revised the Model Concession Agreement for build–operate–transfer (BOT) projects to plug delays by imposing a deadline on the NHAI and incentivising timely work by concessionaires
  • In April 2020, the Government set a target of constructing roads worth Rs 15 lakh crore (US$ 212.80 billion) over the next two years.
  • In May 2020, Border Roads Organisation (BRO) achieved major milestone by digging up a 440-metre long tunnel below the busy Chamba town on Rishikesh-Dharasu highway (NH 94).
  • The Ministry of Road Transport & Highways is expected to award road projects with a total length of around 4,500 kms worth Rs 50,000 crore (US$ 7.15 billion) in 2020.
  • To widen and revamp 1.25-lakh km of roads, Government of India has approved the launch of Phase-III of its rural road programme Pradhan Mantri Gram Sadak Yojana (PMGSY). PMGSY-III is envisaged to upgrade 1,25,000 kms of road length over the next five years at an estimated cost of Rs 80,250 crore (US$ 11.48 billion).
  • Under the Union Budget 2020–21, the Government has allocated Rs 91,823 crore (US$ 13.14 billion) under the Ministry of Road Transport and Highways.
  • Under the Union Budget 2020–21, 30,000 km of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint.

Achievements

Following are the achievements of the Government in the past four years:

  • As on December 2019, 824 projects were recommended for development by the Public Private Partnership Appraisal Committee (PPPAC).
  • A total of 65,000 km of roads and highways are to be constructed under Bharatmala Pariyojana.
  • In the month of December 2018, the Ministry of Road Transport and Highways (MoRTH) touched a record 31.87 km per day average of national highway construction.

Road Ahead

The Government, through a series of initiatives, is working on policies to attract significant investor interest. A total of 200,000 km of national highways is expected to be completed by 2022.

In the next five years, National Highway Authority of India (NHAI) will be able to generate Rs 1 lakh crore (US$ 14.30 billion) annually from toll and other sources.

Note: Conversion rate used in April 2020, Rs 1 = US$ 0.013123

References: Media Reports, Press Releases, Ministry of Road Transport and Highways, NHAI website, Press Information Bureau (PIB)

Notes: ^FDI in construction development Includes: Townships, housing, built-up infrastructure and construction-development projects

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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