Development in highway and road networks to boost economic growth in India

A nation's thriving economy relies on the highways that have emerged as a dominant segment of the economy. Road networks play an essential role in India's growth story. It contributes more than 3.6 per cent of Gross Domestic Product (GDP) or around two-thirds of all transport-related contributions to the GDP of India. Over 85 per cent of India's passenger traffic and about 65 per cent of its freight are transported on roads. With a total length of 5.5 million km, India boasts one of the largest road networks globally. Ninety per cent of India's total passenger traffic uses the country's road network for travel, and it transports 64.5 per cent of all goods and commodities in the nation. Thus, a multiplier impact on development would result from the country's extensive road infrastructure expansion.

Developed highway and road networks in India will have an immediate positive effect on employment status. It will be especially beneficial to the nation's manufacturing growth. As the connectivity system in India will be entirely streamlined, it will make connectivity between states easier, comfort citizens, and ease transportation of goods and services. Developing highways and road networks will lower local pollution levels, increase environmental safety caused due to heavy traffic congestion, encourage weekend travel, and reduce traffic jams. Another critical factor is the spillover of growth. Over time, regions far away from significant road connectivity will also develop following the development they witness along national highways. This is essential for regional development in a country like India, which will help to reduce regional inequalities. 

The Government of India launched several projects to develop highways and road networks. The Bharatmala project (or Bharatmala Pariyojana), a government-funded road and highways development project in India, was launched in 2015. It aimed at improved connectivity and a reliable high-speed road network, particularly throughout economic corridors, border regions, and remote locations. This road network was built with a vision to support the quicker movement of cargo that will reduce the supply chain costs from 18 per cent to 6 per cent and witness a boost in international trade. Nitin Gadkari, Minister of Road Transport and Highways of India, said, "Bharatmala will bring down logistics cost, impacting exports and investment." As it connects the entire India, this project also acts as a pet project of Narendra Modi, Prime Minister, to provide connectivity to India's north-eastern states. The project is still in progress, and approximately 65,000 km of national highways will be built as part of the Bharatmala project across two phases. Due to the increased economic activity in India, the project is anticipated to create 100 million person-days of employment and close to 22 million jobs. 

Roads

Road Network in India: National Highways, Projects, Government Initiatives. Source:  India Brand Equity Foundation


India built 13,298 km of highways in the financial year (FY) 2021 despite the pandemic lockdown, setting a record of 37 km every day in March 2021. India also witnessed an increase in economic growth as it established connections between the hinterland and many important financial centres and cities through the Golden Quadrilateral project, which was started under the Pradhan Mantri Gram Sadak Yojana. The Government of India also focuses on the National Infrastructure Pipeline for the financial year (FY) 2019-25. The construction of tunnels and other underground structures is a subset of the planning of roads and highways. 

  • The Pir Panjal, Chenani-Nashri, Kazigund - Banihal Road, and Rohtang tunnels are among the 6000 km of tunnels made
  • Z-Morh is currently under construction and is 6.50 km long. It is constructed to provide access to Sonamarg, Jammu and Kashmir (J&K) through all the weather condition
  • The construction of a 14.15 km long tunnel called the Zojila has also started. Strategically, this will allow for all-weather connectivity on the NH1 stretch between Srinagar and Leh
  • Other recent tunnel bids include Sudhmahadev and Bhadawara, which will promote alternative connectivity between J&K and Himachal Pradesh and increase tourism in uncharted regions. 

A paradigm shift is taking place in India's road networks. The sector is evolving due to strong demand, increased investments, assistance from liquidity, and significant policy backing. The growth of the private sector has also been essential to India's road infrastructure development. In India, 125 Public-Private Partnership (PPP) projects totaling $ 23.25 billion were underway in the financial year (FY) 2021. As a result of the government's decision to allow 100 per cent Foreign Direct Investment (FDI) in the road sector, several international businesses have partnered with Indian firms to benefit from the industry's expansion. 

The most crucial public resource is road infrastructure because it promotes trade and commerce between big cities and the towns they connect. By allowing economic activity to expand, such connection aids underdeveloped regions' catch-up and inclusive growth. Economic sectors like steel, cement, auto industry, and real estate also benefit from road building. In the upcoming years, a sturdy road network will continue to be a crucial pillar in India's swift economic recovery.

This is co-authored by Bhakti Jain and Ishita Dhar.