India’s road network can pave the path to rapid economic recovery in coming years

October 23, 2021 11:12 AM

Massive road infrastructure development in the country would yield a multiplier effect on development.

Notably, scripting the country’s growth story, India has the second-largest road network globally, spanning a total of 5.89 million km. (Image: REUTERS)

By Deepak Sood

The pulsating economy of a country depends on the roads that serve as its arteries. Therefore, road transport has emerged as a dominant segment with a share of 4.8 per cent in India’s GDP. India witnessed a historic moment on September 9, 2021, when an Emergency Landing Strip (ELF) was dedicated to the nation at Gandhav-Bhakasar section on National Highway-925 at Barmer, Rajasthan, for Indian Air Force. This was the first time that a National Highway was used as an ELF for aircraft. The area, located near the international border, highlights the importance of road construction in strengthening the country’s security networks and infrastructure. In recognition of this, 12 more ELFs are being constructed across the country. 

Notably, scripting the country’s growth story, India has the second-largest road network globally, spanning a total of 5.89 million km. The road network moves 64.5% of all goods in the country. Additionally, 90% of India’s total passenger traffic employs a road network to commute. 

The government has allocated Rs. 111 lakh crores under the National Infrastructure Pipeline for FY 2019-25. Earlier in 2015, India embarked upon Bharatmala Pariyojana to connect the entire country through a network of highways, a steady growth observed since. The Ministry has approved the implementation of 34,800 km of 23 new national highways till 2025, with an outlay of Rs. 5,35,000 crores. Despite pandemic lockdown, India constructed 13,298 km of highways in FY21, with a record of 37 km per day in March 2021. The Golden Quadrilateral project initiated under Pradhan Mantri Gram Sadak Yojana in late 2000 connected the hinterland with various critical financial centres and cities, thereby boosting economic growth.

Massive road infrastructure development in the country would yield a multiplier effect on development. The research has shown the immediate positive effects that transit networks in India have had on employment, especially in rural India and the country’s manufacturing growth. Over the long term, even regions farther away from major roads develop in line with the development witnessed by areas along national highways. Such a spillover of growth is essential to reduce the inequities in regional development in a country like India. 

The road construction industry in India is undergoing a paradigm shift. Robust demand, higher investments, support in liquidity and significant policy support are changing the face of the sector. Significantly, the private sector has emerged as a critical player in developing road infrastructure in India. In FY21, there were 125 PPP projects worth US$ 23.25 billion in India. With the government permitting 100% FDI in the road sector, several foreign companies have formed partnerships with Indian players to capitalise on the sector’s growth.

Tunnelling and underground construction is an extended arm of road, highways project development. The country has a plan to construct 6000 km of tunnels, wherein Pir Panjal, Chenani-Nashri & Kazigund – Banihal Road tunnel and Rohtang tunnels have been completed. The 6.50 km Z-Morh tunnel will provide all-weather access to Sonamarg, which earlier remained unconnected four winter months of the year. The country’s longest 14.15 km Zojila tunnel has also been initiated. Strategically, this will provide all-weather connectivity on the Srinagar-Leh section of NH1. Other new tunnels bid out recently – Sudhmahadev and Bhadawara which will boost tourism in uncharted locations and promote alternative connectivity of J&K with Himachal Pradesh.

India is leveraging ingenious inventions to execute the most complex road projects in a timely and eco-friendly manner, with the additional advantage of lower project lifecycle costs. However, tunneling is subjected to geological risks. The risk matrix needs to address unforeseen circumstances. Of late tunnel, contract conditions were primarily adopted from highway contracts that could not address the specific requirements of the tunnel works in high altitude geological strata. After a detailed assessment of the tunnel projects, in terms of delay and cost overrun, ASSOCHAM advised MoRTH to include Geotechnical Baseline Report as part of the contract. The government accepted the advice, ensuring equitable distribution of the risk between the parties. This inclusion also allowed the risk of unprecedented geological conditions to be taken care of upfront within the contract. Zojila tunnel, which had previously four failed tenders, was bid out following this model and awarded successfully at INR 6,000 crores instead of the initial proposal of INR 11,000 crores. The union minister for Road, Transport and Highways acknowledged the Chamber’s contribution and recognised the nation’s saving worth INR 5000 crores. 

Improved materials for construction, usage of automation and machine-control technologies is rapidly growing. These include project monitoring information systems, intelligent transport management systems, advanced traffic management systems, real-time vehicle tracking and incident management. Establishing a centralised repository of case studies and a technical cell with a panel of experts will help expedite project development. India needs to pronounce national policy, mandating technology data to be made available on nationwide servers, enabling stakeholders to create their ecosystem. 

Road infrastructure is the most important of all public assets, as they encourage economic activity between the large cities and the towns they happen to connect along the way. Such connectivity enables economic activity to spread, allowing under-developed regions to catch up and drive balanced and inclusive growth. Road construction also provides a fillip to other sectors of the economy, including steel, cement, auto, real estate. A robust road network will continue to be an essential pillar in India’s rapid economic recovery in the coming years.

(Deepak Sood is the Secretary-General, ASSOCHAM. Views expressed are the author’s own)

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Govt approves continuation of Scheme for Investment Promotion for 5 years
2Meeting the IMF, RBI forecast of 9.5% GDP growth this year now a challenge, says Dr Rangarajan
3India to log double-digit growth this fiscal: CEA K V Subramanian