Miles to Go

New road projects dipped to a five-year low last fiscal, but execution speed stayed on course

The Journey So Far

More state highways will be developed by the NHAI under the National Highway Development Programme. With its AAA rating, it has access to capital at much cheaper cost.

Road project allocations dipped in FY19 to 5,493 km—a five-year low— largely because of land acquisition issues and the general election (a 68 per cent drop from the 17,055 km awarded in FY18). The execution speed, though, remained constant. In the previous fiscal, the execution speed was 10,855 km; in the current fiscal, construction of more than 11,000 km is expected.

In the first 100 days of Modi 2.0, a blueprint to accelerate the second phase of the Bharat Mala project has been worked out. The big idea right now is to complete the construction of 48,000 km of highways before the next general election in 2024.

Is It Enough?

A big worry policymakers have is the unpredictability of logistics movement patterns beyond the 5-10 year curve (investments have to be done much in advance).

A Rs 1 lakh crore infrastructure fund has been announced in the Budget but financing options and getting foreign investors to commit will remain a challenge

The Unfinished Agenda

Two big challenges—funds crunch and increasing land acquisition costs

NHAI has a plan to raise debt of Rs 75,000 crore from SBI and LIC

More under-construction and completed projects are expected to go for monetisation via InvIT (infrastructure investment trusts) and ToT (transfer of technology)