Time to change gear on national highway project
The national highway programme may be the steroid that India needs to beat the economic blues and get back on the high growth trajectory. Sadly, the progress on NHDP project has been tardy during the tenure of the UPA Govt. There are signs, however, that the authorities realise it is time to change gears, Rajesh Mahapatra and Arnab Hazra explore.delhi Updated: Jan 04, 2009 03:15 IST
From a truckers' stop on the outskirts of Murthal, a sleepy town near Panipat, Haryana, to a bustling mini mall on the Grand Trunk Road, Sukhdev Dhaba has transformed over the past decade - thanks, in part, to the four-laning of the highway.
Until 1998, visitors included mostly truck drivers who would stop for meals of paranthas and dal makhani. Today, it boasts of a 300-seat, multi-cuisine restaurant flanked by a dozen shops for toys, music and books, among other things. With a daily footfall of about 5,000, sales have risen more than 10 times in 10 years.
Across India, the National Highway Development Programme (NHDP), launched in 1999, has scripted many such stories of economic transformation.
Sadly, though, progress on the project has been tardy during the tenure of the UPA government. Not a single NHDP project started after June 2004 - when the UPA government assumed office - has been completed till date, according to an internal report of the National Highway Authority of India (NHAI). Through 2007-08, completion of construction work fell more than 40 per cent short of target.
From problems in land acquisition to environmental clearances and extortion threats in some places, the project has been bogged down by many factors.
A sharp spike in raw material costs in recent years, coupled with frequent leadership changes at NHAI - a clear sign of political interference - and delays in awarding fresh contracts have only accentuated the problems.
National Highways, which account for only 2 per cent of India's 3.3 million km road network, carry 40 per cent of total road traffic, and are crucial to India Inc. The Golden Quadrilateral, which connects Delhi, Mumbai, Chennai and Kolkata, is estimated to have saved Rs 8,000 crore in annual fuel costs.
Highways also boost industries such as steel and cement, among more than 200 others, generate millions of jobs, put money in the hands of people connected with them and, thus, have a multiplier effect on growth of the broader economy.
There are signs, however, that the authorities realise it is time to change gears.
On Friday, the government announced a fiscal stimuli package, which included allowing the India Infrastructure Finance Company to raise Rs 30,000 crore through tax-free bonds to finance ports and highway projects.
While that is a welcome move, much will depend on implementation and the government's ability to remove political interference and ensure timely completion of the project.