On Fast Track: Highway Construction Hits A New High Of 28Km/Day

On Fast Track: Highway Construction Hits A New High Of 28Km/Day

On Fast Track: Highway Construction Hits A New High Of 28Km/Day

Road construction in India has hit the fast lane, touching new highs. According to data released by the Ministry of Road Transport and Highways, 10,000 km of highways have been constructed in the country in last fiscal year (2017-18) that ended March 2018. This has taken the daily average of road construction to 28 km per day against the average of 11 km in FY 2014. The number achieved is the highest ever.

The data released by the National Highways Authority of India (NHAI), on the other hand suggests, awarding of highway construction projects went up by 70 per cent, an all-time annual high in FY18, spanning around 7,400 km. The projects awarded were worth Rs 1.2 lakh crore. This is against 4,300 km projects, worth Rs 59,000 crore that were awarded in FY17.

On a fast track, but, target missed 

The rate at which the highways are being constructed in India is the highest ever, however, it is far from the set target of 41 km per day. Over the years the speed has increased – 11.67 km per day in FY 14, 12 km per day in FY15, 16.5 km in FY16 and 20.6 km per day by November 2017. Also, around 4,260 km roads were constructed in FY14 as against 8,231 km in FY17.

Against the yearly average 5,002 km of highways built in 2011-14, construction in the first three years of the Narendra Modi-led government went up to 6,234 km per year, an increase of 24 per cent. According to the ministry, looking at the pace of development, achieving an average of 30 km per day looks achievable by the end of current fiscal.

Union transport minister Nitin Gadkari has also announced nearly doubling of the length of national highways from 1.15 lakh km to 2 lakh km by the end of 2019. However, the Road ministry will no more use the conventional method for calculating road construction and has decided to adopt the international practice, which is likely to increase highway construction figures substantially in fiscal 2018-19. Currently, the ministry measures highway construction in kilometres, while by the new method it will be measured in kilometres per lane.


A large part of the investment made in the highways has come from the Budgetary allocation, toll collection and NHAI borrowings. The total expenditure for the road infrastructure development was Rs 1.5 lakh crore in FY18, backed by the government and private investors. For FY19, this expenditure is set at Rs 2 lakh crore.

To further fund the projects, the NHAI is working on an equity-funding model for the upcoming expressway and economic-corridor projects. Under this model, the NHAI will auction the roads even before they are built. The model is derived from the authority’s toll-operate-transfer (ToT) model and will be applied to NHAI’s greenfield expressway projects listed under the Rs 5.35-trillion-Bharatmala programme.

Road around the earth

Road infrastructure has been a high-priority for the Narendra Modi-led government from the very beginning, looking at it as the gateway to economic growth of the country. In the current economic scenario, the total Budgetary allocation to fund the ambitious new highway development programme is estimated at Rs 3.43 lakh crore over FY19-FY22. Therefore, starting this financial year, the allocations to the road ministry are expected to increase substantially. In order to support the new programme, allocation to the road ministry for FY19 is expected to be in the range of Rs. 80,000-85,000 crore against Rs 64,900 crore for FY18.

In the next five years, the government is planning to build 83,677 km of roads by spending Rs7 lakh crore. This is the largest-ever outlay for road construction in India and the length of the proposed roads is more than twice the Earth’s circumference (around 40,000km). In all, India has about 96,260 km of national highways, while the total length of all roads is about 3.3 million km.

How highway construction impacts real estate

However, highways might not directly impact the property prices, these do drive population migration and in turn, a rise in demand for housing. For instance, the Yamuna Expressway corridor became a hotspot for real estate investors as the connectivity between two cities improved. The Eastern and the Western Express Highways in Mumbai have created a micro market along the stretches that have now become mainstream localities, shedding the tag of suburban areas. As the highway construction in India will gain speed, more real estate arenas are expected to come up along these stretches.

Last Updated: Fri Apr 06 2018

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