ICRA targets ₹1.43 lakh-cr spend in road sector

Rating agency ICRA in its recent findings concluded that state level spend on roads will increase at a growth rate of 22% to ₹1.43 lakh crore by 2020-21 from ₹96,000 crore in the last fiscal. Driven by Maharashtra and Uttar Pradesh, road expressway projects would give a fillip to the sector in these two states. In Maharashtra, the planned Nagpur-Mumbai expressway alone could see investments of ₹35,000 crore over the next three years, while there would be other road improvement programs through hybrid annuity mode. UP will see almost ₹20,000 crore spend on Purvanchal and Ganga expressways over the next three years, of the total estimated cost of ₹25,000 crore for the project. The states with the highest capital allocation to roads are Uttar Pradesh, Tamil Nadu, Maharashtra, Karnataka and Odisha-- which together accounted for 53% of the total spend in the sector.

The report added that among non-special category states, Chhattisgarh and Jharkhand are the two top states in terms of proportion of development outlay, with around 35% deployed towards road asset creation, while Telangana and Andhra Pradesh are the laggards with less than 10% of development capital allocation. Indian state highways pan 166,000 km, accounting for about 4% of the total road network and carry 25 to 30% of the total road traffic. About 65% of these have less than the minimum desired two-lane carriageways, which indicates the egregious status of this network. After the National Highways Development Project (NHDP), Bharatmala Pariyojana is the largest road development program to be undertaken by the government. The estimated fund requirement for development of national highways under the new program is about ₹6,92,324 crore up to 2022 fiscal, and has led to increased outlay by the centre from 2018 fiscal onwards.