Road Network in India: National Highways, Projects, Government Initiatives
India has the second largest road network in the world. The total 5.5 million kilometres (kms) of Indian road network comprises of national and state highways and urban and rural roads.
These roads bear more than 60 per cent of total goods traffic and 90 per cent passenger traffic in the country. Over the years, the road transportation sector has grown considerably due to improved connectivity between cities, towns and villages in the country and the government has played a major role in this.
The current market size of road network in India
Before talking about the various projects and investments planned by the government in the highway and roads development sector, it is necessary to look at the market size of road network in India. In the financial year 2017-2018, the construction of highways reached 9,829 kms and they were constructed at an average of 26.93 km per day. On the other hand, total length of roads constructed under Pradhan Mantri Gram Sadak Yojana (PMGSY) was 47,447 km in the financial year 2017-18.
Key national highway and road development projects
Here is a look at some of the major highway and road development projects that are planned by the government for the near future...
1. The government has set a target for construction of 10,000 km national highways in the financial year 2019.
2. Nearly 416 ongoing projects worth Rs 3.26 lakh crore are being implemented by the National Highway Authority of India (NHAI) and are in various stages of completion.
3. The biggest ever Highway Development Plan to construct 83,677 kms of roads at an investment of Rs 6.92 lakh crore by 2022 is approved and being implemented. It includes the Bharatmala Pariyojana which aims to build 66,100 km of economic corridors, border and coastal roads and expressways to boost the highway network in the country.
4. In August 2018, government approved highway projects worth Rs 2 billion (US$ 29.83 million) to improve connectivity among states such as Gujarat, Maharashtra, Rajasthan, Madhya Pradesh and Diu.
5. The government has planned development of 5,477 kms of national highways and state roads in 34 remote districts in states of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha and Uttar Pradesh.
6. A total of 200,000 km national highways are expected to be completed by 2022.
7. The government is aiming to construct Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata.
8. Government is also planning to upgrade 10,141 kms of roads in the North-East region through three-phased Special Accelerated Road Development Programme for North-East.
Apart from the above mentioned projects, there are many more national highways and rural roads projects in the pipeline and even the stalled old projects have been restarted by the government.
Key investment initiatives taken by the government
Some of the key government investments and developments in the Indian highway and roads sector are as follows:
1. Giving a huge push to the infrastructure sector, government allotted about $ 100 billion for infrastructure in the Union Budget 2018-19.
2. The budgetary allocation for National Highway Authority of India (NHAI) was increased by 10 per cent to Rs 916.63 billion for 2018-19.
3. In the Budget 2018-2019, rural roads saw an allocation of Rs 19,000 crore under PMGSY.
4. In May 2018, India signed a USD 500 million (Rs 3,371 crore) loan pact with World Bank to provide additional financing for PMGSY rural road projects to build 7,000 km of climate-resilient roads.
5. The government is planning to invest $ 22.4 billion towards road infrastructure in the North-East region during 2018-2020.
6. $ 82 billion will be invested by the government by 2022 under Bharatmala Pariyojana.
7. Government has decided to invest Rs 7 trillion (US$ 107.82 billion) for construction of new roads and highways over the next five years.
In addition to the above investments, through a series of initiatives, government is also continuously working on policies to attract significant investor interest. In line with this, government has allowed 100 per cent Foreign Direct Investment (FDI) in the road sector. This has lead to several foreign companies forming partnerships with Indian players to capitalise on the sectors growth. Furthermore, the government is also promoting Public-Private-Partnership (PPP) projects in road sector and their number has increased drastically over the years. All these plans and projects clearly prove that the development of roads and highways is one of the priority areas for the government.
Impact of the various road and highway development projects on road construction equipment segment
Given the priority of the government towards development of an excellent road infrastructure for the nation, it is believed that the road construction equipment sector has a very bright future ahead. Particularly, the construction of highways is expected to receive a huge boom in the coming years and this will have a huge impact on the construction equipment sector. This is because the Indian government is planning to build 18,637 kms of expressways by 2022. Also, as of now, only 24 per cent of national highway network in India is 4-lane and therefore there is immense scope for their development. This is definitely expected to increase the demand for road construction equipment. In fact, as per the TechSci Research report on India Roads & Highways Market by Type, Competition Forecast & Opportunities, 2011-2025, “The roads and highways sector is expected to exhibit a CAGR of 36.16 per cent during 2016-2025 on the back of growing government initiatives to improve transportation infrastructure in the country.”
While all equipment categories in the road construction equipment sector will see a boom, it is primarily the motor graders segment which is expected to grow considerably. This is because motor graders are highly versatile equipment and can be used to perform various jobs on a road construction site. At present, there are many companies which manufacture motor graders but the one which makes motor graders that are best suited for Indian roads is the indigenous motor grader manufacturer—Mahindra Construction Equipment (MCE). MCE’s offering RoadMaster G90 is best suited for small and medium roads, state highways and national highway expansion projects in the country. It can play a pivotal role in construction of roads and highway which connect each and every part of the country. So, if you are into road and highway construction business, then RoadMaster G90 can be your best bet.