Rural Road Development to Boost Road Construction Equipment Demand
India has the second largest road network across the world at 3.3 million. The country also has one of the highest densities of roads in the world, with 1.42 kilometres of road for every square kilometre of land area. Of the total road length, over 60 percent of the roads are rural (by length). Significant progress has been made in building rural roads since last few years, thus, road construction activities and related equipment demand has grown considerably.
Further, since the inception of Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2000 (the central governments plan to provide good roads to isolated villages), as many as 1.9 lakh habitations across the country have been connected through roads from April 2000 to January 2017. This amounts to 17 per cent of all habitations. Between FY 2000-2001 and January 2017, 1.54 lakh new projects had been approved and 4.87 lakh kilometres of roads has been newly constructed or upgraded under the scheme. This amounts to an average of 80 kilometres constructed per day.
Particularly, the pace of road construction was 133 kilometre per day under PMGSY in 2016-17 as compared to 73 kilometre during 2011-14. The total length of roads, including those under PMGSY, built from 2014-15 till the current year is about 1,40,000 kilometres which is significantly higher than the previous three years.
This large scale development of rural roads is touted to have a very positive impact on the road paving equipment demand too.
Important steps taken by the government to boost rural road development
• The 12th Five Year Plan (FYP) proposes spending of Rs 126,491 crores on rural roads which is on par with the total sanctioned amount for PMGSY since inception. The investment is expected to result in the construction of 1,58,000 km of new roads and upgrades for 84,181 km of existing roads in rural areas.
• Government of India has allocated Rs 1,07,758 crore for Ministry of Rural Development in the FY 2017-2018.
• An allocation of Rs19,000 crore has been made towards the PMGSY to connect far flung habitats in the Union Budget 2017-2018. The target is to complete PMGSY by 2019. In all, Rs 27000 crore is there after state contribution.
Thus, road construction equipment manufacturers in the country are not wrong if they believe that the government’s policies for rural road development will lead to unprecedented growth of road construction equipment sector.
Positive impact of increased focus on rural roads on road CE segment
It goes without saying that developing Indias rural roads will provide mobility and connectivity to more than 800 million people living in rural areas. Further, emphasising the development of rural roads can prove to be a catalyst to Indias goal of maintaining a good GDP growth rate and improving the well-being of millions of underprivileged and rural citizens. Hence, the road CE industry in the country has all the reasons to smile.
Here, it would not be wrong to say that road CE industry plays a major role in developing the rural infrastructure of the country. Given the increased demand for CE for rural roads as well as other roads, there has been a remarkable advancement in road construction technology in the recent years. Many new players have entered in the road CE segment and established players like Mahindra Construction Equipment with their flagship Mahindra EarthMaster backhoe loaders are ruling the Indian road CE segment.
In a nutshell
Road CE industry is one of the most intensive sectors of earthmoving and CE industry. With high investments expected to pour into the rural road segment over the next few years, road CE industry will definitely get a boost and flourish like never before.