History is full of instances of massive road building programmes propelling a country’s growth rates upwards. The German autobahn programme, the massive post-war highway construction programme in US and China’s ambitious highway development programme are just three examples of this. In India too, the launch of the National Highway Development Programme in late 2000 set the stage for the boom that followed three years later.
But over the last five years, the pace of work has slackened. Overall, less than half of the 34,097 km taken up for upgradation under NHDP have been completed or are under implementation.
The government seems to be missing a trick here. It has come out with several stimuli packages to kick start the slowing economy, but apart from allowing IIFC to float bonds to help finance highway and port projects, it not yet addressed the administrative and political issues plaguing this project.
NHDP generates demand from more than 200 industries. Every rupee invested in it generates Rs 3.70 of economic output across the economy. Every job created directly by companies implementing this project creates three jobs across the country.
Giving a boost to NHDP will be just the steroid the economy needs at this crucial juncture. In conjunction with the other measures announced so far, it would go a long way in pump priming the economy.
Our take: Get moving. Immediately.