ROADS AND TRANSPORT; To make India move

Introduction
Make in India is an initiative launched by the Government of India to encourage multinational, as well as national companies to manufacture their products in India. It was
launched by Prime Minister Narendra Modi on 25 September 2014. A major national
initiative designed to facilitate investment; foster innovation; enhance skill development;
protect intellectual property, and build best-in-class manufacturing infrastructure.
Objective.
To convert India into Global Manufacturing Hub
To Provide Employment
Boost Economic Growth
To urge both local and foreign companies to invest in India
Make in India focuses on the following twenty-five sectors of the economy:

Automobiles

Automobile Components

Aviation

Biotechnology

Chemicals

Construction

Defence manufacturing

Electrical Machinery

Electronic systems

Food Processing

Information Technology and Business Process Management

Leather

Media and Entertainment

Mining

Oil and Gas

Pharmaceuticals

Ports and Shipping

Railways

Renewable Energy

Roads and Highways

Space and astronomy

Textiles and Garments

Thermal Power

Tourism and Hospitality

Wellness

Roads and transports

Infrastructure is pivotal to the Make in India initiative be it in the areas of transport,
retail, telecom, or defence and security.India has the second largest road network
across the world at 4.7 million km. This road network transports more than
60 per cent of all goods in the country and 85 per cent of Indias total
passenger traffic. Road transportation has gradually increased over the
years with the improvement in connectivity between cities, towns and
villages in the country.
The Indian roads carry almost 90 per cent of the countrys passenger traffic and around 65 per
cent of its freight. In India sales of automobiles and movement of freight by roads is growing
at a rapid rate. Cognizant of the need to create an adequate road network to cater to the
increased traffic and movement of goods, Government of India has set earmarked 20 per cent
of the investment of US$ 1 trillion reserved for infrastructure during the 12th Five-Year Plan
(201217) to develop the country's roads.

Current scenario

The value of roads and bridges infrastructure in India is projected to grow at a Compound
Annual Growth Rate (CAGR) of 17.4 per cent over FY1217. The country's roads and
bridges infrastructure, which was valued at US$ 6.9 billion in 2009 is expected to touch US$
19.2 billion by 2017.
The construction of highways had reached an all-time high of 6,029 km during FY 2015-16,
and the increased pace of construction is expected to continue for the coming years.
The financial outlay for road transport and highways grew at a CAGR of 12.5 per cent
between FY2010-2016.The plan outlay for FY2016-17 stepped up budgetary support for
Road Transport and Highways to Rs 97,000 crore (US$ 14.46 billion).

Literature review

Importance of the study.

The transport sector is an important component of the economy and a
common tool used for development. Development is related at improving
the welfare of a society through appropriate social, political and economic
conditions. When transport systems are efficient, they provide economic
and social opportunities and benefits that result in positive
multipliers effects such as better accessibility to markets, employment
and additional investments. When transport systems are deficient in terms
of capacity or reliability, they can have an economic cost such
as reduced or missed opportunities and lower quality of life.
At the aggregate level, efficient transportation reduces costs in many
economic sectors, while inefficient transportation increases these
costs.

Objectives
To portray the role of roads and transport sector towards make in india initiative.
To analyse the roles played by FDI on the development of roads and transports in
India

Methodology
We have collected data from relevant secondary sources.the study takes into consideration
last one year data.

Analysis

Power Finance Corporation Limited (PFC) has provided a financial

assistance of Rs 13 crore (US$ 1.94 million) and collaborated with
National Green Highways Mission (NGHM) under National Highways
Authority of India (NHAI) for plantations work on NH7 in Nagpur
region under their Adopt a Green Highways Program.

Indian Institute of Technology, Kharagpur (IIT-Kharagpur) and

National Highways Authority of India (NHAI) have signed a
Memorandum of Understanding (MoU) for research project to
develop technology to construct maintenance free highways in
India.

Mr Nitin Gadkari, Minister of Road Transport and Highways, and

Shipping, has announced the governments target of Rs 25 trillion
(US$ 372.8 billion) investment in infrastructure over a period of
three years, which will include Rs 8 trillion (US$ 119.3 billion) for
developing 27 industrial clusters and an additional Rs 5 trillion (US$
74.56 billion) for road, railway and port connectivity projects.

National Highways Authority of India (NHAI) plans to invest around

US$ 250 billion in 240 road projects spanning 50,000 kms over the
next five to six years, as per Mr Raghav Chandra, Chairman of NHAI.

The National Highways Authority of India (NHAI) has signed a MoU

with the National Remote Sensing Centre (NRSC) under Indian Space
Research Organisation (ISRO) and North East Centre for Technology
Application and Research (NECTAR) to use spatial technology such
as satellite data to monitor and manage national highways.

The Government of India plans to award 100 highway projects under

the Public-Private Partnership (PPP) mode in 2016, with expectations
that recent amendments in regulations would revive investor
sentiments in PPP projects in the infrastructure sector.

The Ministry of Road Transport and Highways has undertaken

development of about 7,000 km of national highways
underBharatmalaPariyojana at an estimated cost of Rs 80,000 crore
(US$ 11.93 billion) in consultation with state governments. National
Highways Authority of India (NHAI) has invited bids for preparing
Detailed Project Reports (DPRs) for road development along the
borders and coast lines under the Bharat Mala project.

The Cabinet Committee on Economic Affairs (CCEA) has permitted

100 per cent equity divestment by private developers after two
years of construction completion for all BuildOperateTransfer
(BOT) projects, irrespective of the year of award of the project.

The Union government approved the construction of around 1,000

km of expressways at acost of Rs 16.68 crore (US$ 2.49 million) on a
design-build-finance-operate-transfer (DBFOT) mode. The approved
corridors are Delhi-Chandigarh (249 km), Bengaluru-Chennai (334
km), Delhi-Jaipur (261 km) and Vadodara-Mumbai (400 km). The
government will also take up the development of 135 km long
Eastern Peripheral Expressway at an estimated cost of Rs 5,763
crore (US$ 859.34 million).

Government Initiatives

Some of the recent developments are as follows

The Ministry of Road Transport and Highways and National Highways

Authority of India (NHAI) plan to take up 82 highway development
projects under the Bharatmala project, which would help in
improving connectivity to both major as well as minor ports in the
country.

The Government of India plans to invest Rs 3 trillion (US$ 44.73

billion) for developing 35,000 km of roads across the country, of
which 21,000 km will be economic corridors and 14,000 km will be
feeder routes, which is expected to improve freight movement, ease
traffic bottlenecks and improve inter-city connectivity in the country.

A panel set by Government of India has cleared 16 highway projects

worth Rs 7,456 crore (US$ 1.11 billion) for bidding in 11 states,
totalling a length of 622 kilometer (km), including the construction
of new roads, widening and expansion of existing highways, and
rehabilitation and upgrade of some projects.

The Government of India is looking at bundling public-funded

national highway projects that can be monetised by leasing out to
private players for toll collection, which would enable the
concessionaire to achieve economies of scale, synergy in operations
and achieve an appropriate investment size.

The Government of India plans to introduce a new framework on

renegotiation of Public Private Partnership (PPP) contracts, which will
allow renegotiations based on sector-specific issues, especially for
national highways and ports, and provide greater flexibility to the
parties involved.

The National Highways Authority of India (NHAI) seeks to improve

execution of highway projects by delegating powers to its Regional
Officers (RO) for hiring of equipment and labourers to demolish
structures falling within the project, which will enable NHAI to make
encumbrance free land available more speedily to the
concessionaire/contractors.

The Ministry of Road Transport and Highways plans to set up Land

Acquisition (LA) cells across the country, which will work towards
resolving issues related to land acquisition and ensure speedy
compensation disbursal by the state governments.

The Ministry of Road Transport and Highways plans to build five

more greenfield expressways across the country, which are
expected to reduce travel time and propel economic growth. Mr
Nitin Gadkari, Minister of Road Transport and Highways, and
Shipping has said that the government has accelerated the
construction of highways and expects the revival of investments in
infrastructure sector to contribute more than 2 percentage points to
the countrys Gross Domestic Product (GDP) in the next two years
and to create five million jobs.

The Cabinet Committee on Economic Affairs (CCEA) has approved a

hybrid annuity model for implementing highway projects, which
adopts a more rational approach to allocation of risks between the
government and the private developer, and is hence expected to
revive highway projects construction in India.

India and Japan are planning to enter into a partnership and launch
an infrastructure finance company which will provide soft loans for
Indian road projects with a credit target of Rs 2 lakh crore (US$
29.82 billion).

The Cabinet Committee on Economic Affairs (CCEA) has approved a

one-time fund infusion in road projects which are at least 50 per
cent complete till November 2014, but have not progressed further
because of shortage of funds.

Minister for Roads, Transport and Highways Mr Nitin Gadkari

announced that the government is planning a compensation policy
for road sector developers, which will seek to compensate
companies for any delays related to clearance for road projects.

With the objective of reviving private investment in the roads sector,

the Ministry of Roads and Highways is now working on two more
models for attracting capital. One model proposes allowing bidding
of a road project on the basis of the least present value, and the
other envisages selling off road projects that have been built using
government funds.

The Indian government plans to set up a finance corporation with an

amount of Rs 1 trillion (US$ 14.82 billion), in collaboration with
Japanese investors, to fund projects in the roads segment.

Conclusions
Indian transport infrastructure still needs to be upgraded to meet the demands of the growing
population. Poor ruralNitin Gadkari, the Union Transport Minister, said, We would like to
convert the transportation system into electric, bio-fuel so as to reduce pollution and the
dream of Make in India will be accomplished.urban market connectivity and deplorable
roads add to the woes of a fragmented logistics industry

References:
Ministry of Road Transport and Highways,
NHAI website,
Press Information Bureau (PIB),
Budget 2016-17
Media Reports, Press Releases,