Last Updated: January 16, 2020
Last Updated: October, 2019
India has second largest road networks in the world, spanning a total of 5.5 million kilometres (kms).
The 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 the 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^ since April 2000 stood at US$ 25.12 billion as of June 2019. MAIF 2 became the first largest foreign investment in Indian roads sector under TOT mode worth Rs 9,681.5 crore (US$ 1.50 billion). As of November 2018, total length of projects awarded under Bharatmala Pariyojana (including residual NHDP works) was 6,460 kms for a total cost of Rs 152,000 crore (US$ 21.07 billion). The total amount of investments* are estimated to reach Rs 158,000 crore (US$ 22.61 billion) in FY19. The government’s move to cut GST rates on construction equipment from 28 per cent to 18 per cent is supposed to give boost to the industry.
The Ministry of Road Transport and Highways estimated the total expenditure of Rs 83,016 crore (US$ 11.87 billion) for 2019-20. Transfer to National Investment Fund (NIF) is estimated at Rs 6,070 crore (US$ 868.51 million) for 2019-20.
The Ministry of Road Transport and Highways has fixed a target for construction of 12,000 km national highways in FY20. The length of national highways constructed reached 1,31,326 kms. The Government of India aims to construct 65,000 km of national highways at the cost of Rs 5.35 lakh crore (US$ 741.51 billion) by 2022. In the month of December 2018, the Ministry of Road Transport and Highways (MoRTH) touched a record 31.87 kilometre per day average of national highway construction. In the coming years, NHAI’s increased delegation autonomy along with Bharatmala Pariyojana initiative is expected to enable growth in awarding momentum. ^ NHs under the Bharatmala Pariyojana programme which aims to optimise the productivity of freight and passenger movement by filling the critical infrastructure gaps also sight to increase the number of districts with national highway linkages from 300 to 550. By 2024, Bharatmala Pariyojana is expected to see 55 per cent of cost overrun and awarding activities to be completed.
The Ministry has allocated Rs 3,150 crore (US$ 450.71 million) for maintenance of roads and highways in FY20, also allocated Rs 280 crore (US$ 40 million) towards road transport and safety. The Government of India has set a target to complete one road projects every two days as a part of 100-day plan.
As per Union Budget 2019-20, Pradhan Mantri Gram Sadak Yojana (PMGSY) has brought many socio-economic gains in the rural areas. Under the Union Budget 2019-20, the Government of India allocated Rs 19,000 crore (US$ 2.63 billion) for the Pradhan Mantri Gram Sadak Yojana (PMGSY). As pe Union Budget 2019-20, 30,000 kms of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint. PMGSY-III is envisaged to upgrade 1,25,000 kms of road length over the next five years, with an estimated cost of Rs 80,250 crore (US$ 11.48 billion). 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).
As per the Union Budget 2019-20, Government proposed to permit investments made by FIIs/FPIs in debt securities issued by Infrastructure Debt Fund – Non-Bank Finance Companies (IDF-NBFCs) to be transferred/sold to any domestic investor within the specified lock-in period.
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, ^ - Crisil Research
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Last Updated: January 16, 2020
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