The road sector in the country has seen substantial pace in construction activity in the last two years. For the current financial year, the Ministry of Road Transport and Highways (MoRTH) has increased the target for award of new highways by two-and-half times to 25,000 kilometers. Of this, 15,000 km will be awarded by National Highways Authority of India (NHAI) and the rest by the ministry and National Highways Infrastructure Development Corporation.

While road construction has gone up significantly from 11 kilometer per day in FY14 to 16.5 km/day in FY16, the government set an ambitious target of constructing 41 km of national highways per day for FY17. The target for construction of new roads was increased to 15,000 km for this financial year as compared to 6,000 km done in the last fiscal. Much of the pace in road construction can be attributed to the ministry being empowered to decide on the mode of delivery, increased threshold for project approval, implementation of models like hybrid annuity and amendments to the Model Concession Agreement for build-operate-transfer projects.

The government had met bankers and road contractors in January to address the issue of stalled highway projects worth R40,000 crore. The number of stalled projects has also come down considerably from 384 in FY14 to 74 in FY16. In the recent budget, the government gave a fresh impetus to rural roads with a 25% increase in allocation under Pradhan Mantri Gram Sadak Yojana (PMGSY). Overall, it has taken further steps to speed up the process of road construction by allocating R55,000 crore for roads and highways on top of R15,000 crore to be raised by NHAI through bonds. Thus the total investment in the road sector, including PMGSY allocation, is close to R97,000 crore for FY17.