Road Network in India: National Highways, Projects,

Govt Initiatives
ibef.org/industry/roads-india

ROADS INDUSTRY REPORT

Aug, 2022

INTRODUCTION

India has the second-largest road network in the world, spanning a total of 5.89 million
kilometres (kms). This road network transports 64.5% of all goods in the country and 90%
of India’s total passenger traffic uses road network to commute. Road transportation has
gradually increased over the years with improvement in connectivity between cities,
towns and villages in the country.

In India, sale of automobiles and movement of freight by roads is growing at a rapid rate.

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MARKET SIZE

Highway construction in India increased at 17.00% CAGR between FY16-FY21. Despite

pandemic and lockdown, India has constructed 13,298 km of highways in FY21. Under
the Union Budget 2022-23, the Government of India has allocated Rs. 199,107.71 crore
(US$ 26.04 billion) to the Ministry of Road Transport and Highways. In FY22 (until
December), the Ministry of Road Transport and Highways constructed national highways
extending 5,835 kms. In June 2021, the Ministry of Road Transport and Highways
constructed 2,284 kms of national highways compared with 1,681 kms in June 2020.

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

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.

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In October 2020, the National Investment and Infrastructure Fund (NIIF) is making
progress towards integrating its road and highway portfolio. The NIIF has acquired Essel
Devanahalli Tollway and Essel Dichpally Tollway through the NIIF master fund. These
road infra-projects will be supported by Athaang Infrastructure, NIIF's proprietary road
network, assisted by a team of established professionals with diverse domain expertise in
the transport field.

KEY INVESTMENTS/DEVELOPMENTS

The Union Minister of State for Road, Transport and Highways has stated that the
Government aims to boost corporate investment in roads and shipping sector, along with
introducing business-friendly strategies, which will balance profitability with effective
project execution. According to the data released by Department for Promotion of
Industry and Internal Trade Policy (DPIIT), construction development^ sector attracted
Foreign Direct Investment (FDI) inflow worth US$ 26.21 billion between April 2000-March
2022. In FY22 (until November 2021), the private sector invested Rs. 15,164 crore (US$
1.98 billion) in roads.

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GOVERNMENT INITIATIVES

Some of the recent Government initiatives are as follows:

NHAI plans to construct 25,000 kilometres of national highways in 2022-23 at a

pace of 50 km per day.
India’s Gati Shakti program has consolidated a list of 81 high impact projects, out of
which road infrastructure projects were the top priority. The major highway projects
include the Delhi-Mumbai expressway (1,350 kilometres), Amritsar-Jamnagar
expressway (1,257 kilometres) and Saharanpur-Dehradun expressway (210
kilometres). The main aim of this program is a faster approval process which can be
done through the Gati shakti portal and digitized the approval process completely.
In the Union Budget 2022-23, government has planned for an increase in allocation
for the central road fund by 19%, the total fund was Rs. 2,95,150 crores (US$ 38.86
million).
As of March 2022, the government plans to spend Rs. 10,565 crore (US$ 1.38
billion) on the Trans-Arunachal Highway and Kaladan Multi-Model Transport Project,
as well as other roads development projects such as capital connectivity, district
connectivity, connectivity to the international border, and improvement and
strengthening of roads in the region of Sikkim.
The Indian government launched Gati Shakti-National Master Plan, which will help
lead a holistic and integrated development of infrastructure generating immense
employment opportunities in the country.
In October 2021, the government issued a notice related to concessions under the
Vehicle Scrapping Policy (effective from April 2022) to encourage vehicle owners
towards discarding old vehicles which have higher fuel consumption costs.
In October 2021, the government launched a conversion project for 15 major roads
in the Agartala smart city, the project will convert these roads to weather-resilient
ones, and further strengthen development of the region.
In October 2021, the government announced rules to improve road safety, such as
fixed driving hours for commercial truck drivers and a mandate to install sleep
detection sensors in commercial vehicles.
In FY22 (until October), the Ministry of Road Transport and Highways constructed
national highways extending 4,450 kms compared with 4,956 kms in FY21 (until
October).
In October 2021, the government announced a plan to install charging stations
every 40 to 60 kilometres on national highways to strengthen wayside amenities; in
line with this, ~700 e-vehicle charging stations are expected to be installed by 2023,
covering 35,000 to 40,000 kms of national highways.
In September 2021, the Ministry of Road Transport and Highways constructed
national highways extending 3,824 kms compared with 3,335 kms in August 2021.

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 To transform road infrastructure in Punjab, Haryana and Rajasthan, the Indian
government has planned to construct roads extending 313 kms for Rs. 11,000 crore
(US$ 1.48 billion).
In September 2021, the Indian government announced road projects worth Rs. 1
lakh crore (US$ 13.48 billion) to develop road infrastructure in Jammu and Kashmir.
The region has also witnessed growth in national highways, from 7 in 2014 to 11 in
2021.
In September 2021, the Ministry of Road Transport and Highways allocated Rs.
7,270 crore (US$ 980.9 million) for road safety programmes in 14 states that
constitute 85% of the total road fatalities in India.
Under Phase-I of Bharatmala Pariyojana, the Ministry has approved implementation
of 34,800 km of national highways in 5 years with an outlay of Rs. 5,35,000 crore
(US$ 76.55 billion). Under this scheme, 22 greenfield projects (8,000 kms length)
are being constructed; this is worth Rs. 3.26 lakh crore (US$ 43.94 billion).
The government also aims to construct 23 new national highways by 2025.
The Minister for Road Transport & Highways and Micro, Small and Medium
Enterprises, Mr. Nitin Gadkari, is targeting to construct 40 kms per day in FY22.
In August 2021, the Union Minister of Road Transport and Highways, Mr. Nitin
Gadkari, announced to launch 1,080-km (road construction) projects worth Rs.
25,370 crore (US$ 3.4 billion) in Gujarat under the Bharatmala Pariyojana—the
ambitious road and highways project that aims to build highways from Maharashtra,
Gujarat, Rajasthan, Punjab, Haryana and then cover the entire string of Himalayan
territories.
In August 2021, the Ministry of Road Transport & Highways extended certain relief
measures provided earlier in view of the second COVID-19 wave. The following
relief measures have been extended:
Relaxation in Schedule H/G with effect from July 01, 2021, until September
30, 2021, to improve liquidity of funds available with contractors and
concessionaire.
Arrangement regarding direct payment to the approved sub-contractor through
an escrow account can be continued until September 30, 2021, or completion
of work by the sub-contractor, whichever is earlier.
In August 2021, the Union Minister of Road Transport and Highways, Mr. Nitin
Gadkari sanctioned Rs. 100 crore (US$ 13 million) to restore roads affected by
heavy rains in Konkan and Western Maharashtra. This includes Rs. 52 crore (US$
7.0 million) for temporary restoration and Rs. 48 crore (US$ 6 million) for permanent
restoration.
In August 2021, the central government sanctioned >Rs. 600 crore (US$ 81 million),
of the Central Road and Infrastructure Fund (CRIF), for construction of 42 roads
and bridges in Uttarakhand.

ROAD AHEAD

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The Government, through a series of initiatives, is working on policies to attract significant
investor interest. A total of 200,000 km of national highways is expected to be completed
by 2022. In the next five years, National Highway Authority of India (NHAI) will be able to
generate Rs. 1 lakh crore (US$ 14.30 billion) annually from toll and other sources.

Note: Conversion rate used for July 2022 is Rs. 1 = US$ 0.013

References: Media Reports, Press Releases, Ministry of Road Transport and Highways,
NHAI website, Press Information Bureau (PIB)

Notes: ^FDI in construction development Includes: Townships, housing, built-up

infrastructure and construction-development projects

ROADS INDUSTRY REPORT

Aug, 2022

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