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

Road and Infrastructure Industry Analysis

    Last updated on Jul, 1 2020

India has the second largest road network in the world, spanning a total of 5.89 million kilometres (kms).

Private sector has emerged as a key player in the development of road infrastructure in India. Increased industrial activities, along with increasing number of two and four wheelers have supported the growth in road transport infrastructure projects. The Government’s policy to increase private sector participation has proved to be a boon for the infrastructure industry with many private players entering the business through the public-private partnership (PPP) model.

With the Government permitting 100 per cent Foreign Direct Investment (FDI) in the road sector, several foreign companies have formed partnerships with Indian players to capitalise on the sector's growth. Cumulative FDI in construction development^ stood at US$ 25.66 billion between April 2000 and March 2020. The Government’s move to cut GST rates on construction equipment from 28 per cent to 18 per cent is expected to give boost to the industry.

Highway construction in India increased at 21.44 per cent 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 June 2020, NHAI became fully digital with the launch of unique cloud based and Artificial Intelligence powered Big Data Analytics platform – Data Lake and Project Management Software.

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.

On July 07, 2020, NHAI decided to undertake performance assessment and ranking of highways in the country to improve quality and provide higher level of service to highway commuters.

Under Union Budget 2020-21, the Government has allocated Rs 91,823 crore (US$ 13.14 billion) to the Ministry of Road Transport and Highways. The Government plans to invest Rs 15 lakh crore (US$ 214.62 billion) in the next five years.

Pradhan Mantri Gram Sadak Yojana (PMGSY) has brought many socio-economic gains in the rural areas. In Union Budget 2020-21, the Government has allocated Rs 19,500 crore (US$ 2.79 billion) under Pradhan Mantri Gram Sadak Yojana (PMGSY). As per the Union Budget for FY20, 30,000 km of PMGSY roads were to be built using green technology, waste plastic and cold mix technology, thereby reducing carbon footprint. To widen and revamp 1,25,000 kms of road over the next five years, the Government has approved the launch of phase-III of PMGSY at an estimated cost of Rs 80,250 crore (US$ 11.48 billion).

Note: TOT - toll operate transfer, * - investments include Budgetary support, IEBR refers to Internal and Extra Budgetary Resources and constitutes the resources raised by the public sector units through profits, loans and equity and Private sector investments; according to Ministry of Road Transport and Highways, ^ - FDI in construction development Includes: Townships, housing, built-up infrastructure and construction-development projects

Indian Road Industry Report (July, 2020)
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Click to access the Road Industry Archived Report

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