Delhi to Haridwar, Delhi to Jaipur in two hours, Delhi to Chandigarh in two and a half hours, Delhi to Amritsar in four hours, Delhi to Katra in six hours, Delhi to Srinagar in eight hours, Delhi to Mumbai in twelve hours, and Chennai to Bangalore in two hours. This statement was made by India’s National Highways and Road Transport Minister Nitin Gadkari, who has started his new tenure in the new government.
According to the press release, in the year 2014, the length of National Highways in India was 91,000 km. By 2022-23, the total length of National Highways has become 145,000 km, i.e., in nine years. This growth has happened in two ways: new national highways were built, and some old roads were notified as national highways. Also, people say that the quality of national highways has improved. During this period, new expressways like the Mumbai Delhi Expressway were built. New projects like Bharat Mala and the Chardham Corridor have also started.
While talking to the media, Nitin Gadkari quoted a line from former US President Kennedy: “American roads are not good because America is rich, but America is rich because American roads are good.” This statement of Kennedy means that the roads of America are not good because America is a rich country, but America is a rich country because the roads of America are excellent. In this one sentence of Kennedy, a concept of economics is hidden, which is called the Capital Expenditure Multiplier Effect.
What is the Capital Expenditure Multiplier Effect, and what is its role in the increasing length of roads in India?
Recently, news came that the National Highway Authority of India (NHAI) is going to build 900 km of road through BOT (Build, Operate, and Transfer). BOT is a method under the Public-Private Partnership model (a partnership between the government and private companies). It means that both the government and private companies will build the road together. Nitin Gadkari often says one more thing: that the budget he has received from the government is less than the money he spends to build roads.
Bharat Mala Pariyojana, a project launched in 2017, previously known as NSDP, has many of its projects under Bharat Mala today. According to the proposal, 83,000 km of roads are to be built, aiming to connect more than 550 districts with four-lane highways. For this, a project was made for these roads. According to the estimate, ₹10400 crores will be spent on all these projects. There are many segments in the Bharat Mala project. The first is economic corridors like the Mumbai-Kolkata Economic Corridor, Mumbai-Agra Economic Corridor, Sagar-Lucknow Economic Corridor, Surat-Nagpur Economic Corridor, North-East Economic Corridor, and apart from these, there are 39 more economic corridors.
Along with this, logistics parks will also be built for the hub and spoke model, which will be connected to these economic corridors. The hub and spoke model refers to a transport system where one location serves as the hub, and the rest of the locations are connected to it. Just imagine it like a bicycle wheel: there is a hub in the middle of the wheel, and spokes are attached to it. Logistics parks will be built in 50 cities such as Ambala, Mumbai, Ludhiana, Pune, and Indore.
The second part is the expressways: Delhi-Mumbai Expressway, Amritsar-Bhatinda-Jamnagar Expressway, Kanpur-Lucknow Expressway, Delhi-Amritsar-Katra Expressway, and Bangalore-Chennai Expressway.
Apart from this, national corridors will be built, feeder roads will be constructed, and inter-corridor roads (roads connecting two corridors) and port connectivity roads will be developed.
The second project initiated during Gadkari’s tenure is the Chardham Corridor. Prime Minister Modi also calls it a PET project. The aim of this project, which started in 2016, is to connect the four Dhams of Uttarakhand—Gangotri, Yamunotri, Badrinath, and Kedarnath—with a two-lane all-weather road. Currently, work is ongoing on this project. Construction of 600 km out of the 889 km of road has been completed.
Along with this, logistics parks will also be built for the hub-and-spoke model, which will be connected to these economic corridors. The hub-and-spoke model is a transport system where one location serves as the hub, and the rest of the locations are connected to it. The hub becomes the center point, with spokes radiating out from it. Imagine it like a bicycle wheel: there is a hub in the middle of the wheel, and spokes are attached to it. Logistics parks will be built in 50 cities such as Ambala, Mumbai, Ludhiana, Pune, and Indore.
The second part of the project involves the construction of expressways, including the Delhi-Mumbai Expressway, Amritsar-Bhatinda-Jamnagar Expressway, Kanpur-Lucknow Expressway, Delhi-Amritsar-Katra Expressway, and Bangalore-Chennai Expressway.
Apart from this, national corridors, feeder roads, and inter-corridor roads (roads connecting two corridors) will be built, along with port connectivity roads.
The second project initiated during Gadkari’s tenure is the Chardham Corridor, also called a PET project by Prime Minister Modi. The aim of this project, started in 2016, is to connect the four Dhams of Uttarakhand—Gangotri, Yamunotri, Badrinath, and Kedarnath—with a two-lane all-weather road. Currently, work is ongoing, and 600 km out of the 889 km of road has been completed.
Where did Nitin Gadkari get the money to build roads and expressways?
The government will give contracts to private companies, along with the required details. Suppose a contract for building a road is awarded to a company named A. The government does not provide the full funding for building the road; instead, Company A has to raise the money itself. According to the requirements, the entire highway has to be designed, constructed, and commissioned, but ownership of the road will remain with the Government of India.
What about the profit for Company A? After constructing the road, the government will lease it to the company for a few years. During this period, Company A will earn money through toll tax.
As long as the road is leased to Company A, the maintenance responsibility also lies with the company. When the lease period ends, the road will be returned to the government. This arrangement has three benefits: the government saves money, the road is completed, and the company’s business thrives, which boosts the economy. Additionally, good roads are made available for public use, creating employment opportunities for cement factories, truck drivers, and other related sectors.