India spends record $18bn to develop roads as polls loom

Mumbai, India - India invested a record US$18bn in the financial year ended March, to develop highways and improve road connectivity across the nation, according to a statement from Ministry of Road Transport and Highways.

Prime Minister Narendra Modi’s administration spent 44 per cent more than a year ago on building roads. The government plans to construct 83,677km of roads by 2022 to boost economic growth and employment, under its US$106bn Bharatmala infrastructure development plan.

The government is rushing to enact policies that will boost em- ployment opportunities in Asia’s third-largest economy before elections next year. Modi swept to power in May 2014 with the biggest electoral mandate in three decades after promising to create 10mn jobs each year for the country’s burgeoning youth population.

“The renewed focus on road building will continue to improve connectivity thereby enhancing the overall efficiency in the economy,” said Shubhada M Rao, chief economist at Yes Bank Ltd. “Focus on road building will also help employment generation.”

The administration awarded a total of 17,055km of orders in year ended March, around seven per cent more from a year ago, according to the statement. Construction of roads last fiscal increased to 9,829km from 8,231km a year earlier.

The breakneck pace of highway projects has resulted in swelling of order books of most road developers to an all-time high, IIFL Wealth Management analyst Alok Deora said. They ‘will ensure strong topline’ and earnings growth in current and next financial years, Deora said.

India constructed 26.9km of roads daily in the year to March 31.