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The Government of India has allocated Rs. 111 lakh crore (US$ 13.14 billion) under the National Infrastructure Pipeline for FY 2019-25. The Roads sector is expected to account for 18% capital expenditure over FY 2019-25

Road and Infrastructure Industry Analysis

    Last updated on Mar, 19 2021

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% 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% to 18% is expected to give boost to the industry.

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

In October 2020, the foundation stone was established for nine National Highway projects—with a total length of ~262 km—worth >Rs. 2752 crore (US$ 371.13 million) in Tripura.

In October 2020, The Minister of Defence, Mr. Rajnath Singh, dedicated the 19.85 km alternate alignment of the National Highway 310 in East Sikkim for defence preparedness and socioeconomic development in the state.

In October 2020, National Highway projects worth Rs. 19,800 crore (US$ 2.67 billion) in Kerala have been initiated by the Ministry of Road Transport and Highways and are expected to be completed by 2024. 30 projects—with a length of ~549 km—worth Rs. 5327 crore (US$ 718.40 million) are under implementation.

In October 2020, the Department of Central National Highways has issued a permit to construct a 122 km National Highway from Kalvakurthi in Telangana to Karivena in Andhra Pradesh. The new national highway would reduce the distance to Tirupati from Hyderabad by 80 km.

Under Pradhan Mantri Gram Sadak Yojana (PMGSY), in the UT of Jammu & Kashmir, 3,261 roads of length of 19,277 km and 243 bridges have been sanctioned, out of which 1858 roads of length 11,517 km and 84 bridges have been completed. Similarly, in the UT of Ladakh, 142 roads of length of 1207 km and 3 bridges have been sanctioned, out of which 96 roads of length 699 km and 2 bridges have been completed till July 2020.

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 (January, 2021)
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