India’s autobahns

NHDP’s progress is something to crow about

It is remarkably good news if 13,000 kms of six-lane and four-lane national highways are added by 2007. By the way, India added 13,000 kms during the 50 years since Independence. The proposal in question is the National Highway Development Project with the Golden Quadrangle linking the four metros, a North-South corridor linking Srinagar with Kanyakumari and an East-West corridor linking Silchar with Porbandar. Understandably, there was initial skepticism about a government project in the road sector, where land acquisition, compensation and court intervention are major issues. Financial arrangements have been tied up and other than National Highways Authority of India’s special purpose vehicles, there are build-operate-transfer schemes through tolls and annuities. Several contracts have been already awarded and the completion of the Golden Quadrangle has been pre-poned from December 2004 to December 2003, while the two corridors have been pre-poned from December 2009 to December 2007. For speed alone, the government deserves a pat on the back. There has, however, been some unwarranted Keynesian hype about the direct multiplier effects of this project, through employment generation and demand for cement and steel: since Rs 54,000 crore will be spent over the next six years, the direct impact on GDP is less than 0.5 per cent.

The indirect effect of NHDP is more important. For the Golden Quadrangle, travel time will be reduced by 50 to 60 per cent, with obvious cost savings. For smaller cities located on the Quadrangle or the corridors, connectivity will improve several-fold, with implications for economic growth. It is true that some cities will be bypassed. But the buck for not developing road infrastructure cannot be passed to the centre. The centre is responsible for national highways. The responsibility for state highways and smaller road networks vests with states and sometimes local bodies. The lesson of reforms to end the perpetual malaise of blaming the centre for everything that goes wrong. On the NHDP proper, quality of road construction has always been an issue.As long as quality doesn’t suffer, the government does have something to crow about.