Budget 2018: Centre’s financial aid to highways raised to Rs 71,000 crore; up by 16 percent

Union Budget for 2018-19 gave massive push to National Highways as the budgetary allocation was pegged at Rs 71,000 crore, up from Rs 61,000 crore allocated during 2017-18.

“India needs massive infrastructure development up to Rs 50 lakh crore… At this speed, I am confident we will complete construction of 90,000 km of National Highways,” Arun Jaitley, union minister for finance, said during the budget speech.

Riding on the back of Bharatmala Programme, union ministry of road transport and highways’ allocation saw a whopping jump of 16.39 percent relative to last year’s budgetary support. This is Modi government’s fifth and last full budget before the Lok Sabha elections of 2019.

Bharatmala, Centre’s flagship programme to build intensive network of National Highways, has a capital outlay of Rs. 6.92 lakh crore and will see 60,000 kilometer of road length being laid down by the government. The first phase of Bharatmala got Cabinet Committee’s approval in October last year and entails construction target of 34,800 km by 2022 at Rs. 5.35 lakh crore.

The National Highways’ programme, which subsumed National Highways Development Programme (NHDP), proposes to construct Economic Corridors (9000 km), Inter Corridor and Feeder Route (6000 km), National Corridors Efficiency Improvement (5000 km), Border Roads and International Connectivity (2000 km), Coastal Roads and Port Connectivity (2000 km), Green field Expressways (800 km) and remaining work of NHDP works (10,000 km).

The union budget allocated Rs 71,000 crore as budgetary support, Rs 91,663.13 crore as public sector investment to National Highways Authority of India and Rs 315 crore for road transport and safety.

Addressing media after budget presentation, union minister for road transport and highways, Nitin Gadkari, said that the budget for 2018-19 was “historic”.

Infrastructure development has been one of the key interest areas of this government as the allocation has seen a jump of approximately 40 percent in three years’ time, between 2015-16 and 2017-18. While the allocation for Highways was Rs. 46,912.58 crore in 2015-16, it touched Rs. 61,000 crore last year.

“It is heartening to note the rapid progress made by the roads sector, the government expects an addition of 9000 km in this year alone, taking the cumulative km under NHAI to little over 1 Lakh km, which is a 10 percent jump in a single year,” Jagannarayan Padmanabhan, senior director, CRISIL Infrastructure Advisor told Moneycontrol, adding, “Bharatmala which is expected to be the flagship road programme of the government has got an outlay of close to Rs 1.2 lakh crore. Continued budgetary support indicates the push for EPC and HAM (Hybrid Annuity Model) of execution”.

India’s total NH network presently stands at 1,15,435 km, up from 96,000 km when the government took over. Union minister for road transport and highways wishes to take the number till two lakh km before the term ends in 2019.

Investment in highways has multi-fold impact as this opens gateway for supply industries such as cement and steel coupled with creating many fold job opportunities. Bharatmala is expected to create two million direct jobs.

As per data provided by the government, per day construction has risen to 20.26 km (April to November 2017). It was approximately 12 km per day in 2014-15. Centre is hopeful of closing the financial year 2017-18 at 25 km per day and wishes to take the construction rate to 40 km per day by the end of 2018-19.