Exploring ways to fund India's road network expansion through land value

26 Apr 2024 CW Team

The government was reported to be actively exploring policy mechanisms to leverage the increase in land value resulting from road projects, with the aim of bolstering funding for infrastructure development.

It was stated that the Ministry of Road Transport and Highways (MoRTH) was examining global best practices for innovative infrastructure financing methods. It was further mentioned that the decision on the chosen mechanism would be finalized after the new government assumed office.

According to a government official, the strategy aligned with the ministry's long-term vision. They expressed that the goal was to capture and reinvest the rise in land value along upcoming expressways to finance future infrastructure projects.

The proposed 'betterment' levy entailed a one-time charge on property owners near expressways who benefited from government infrastructure development. It was noted that the fee would vary based on proximity to the expressway.

It was highlighted that land value capture was a globally recognized tool for generating revenue for public services. It was mentioned that countries like Colombia and Brazil were experimenting with the betterment levy, while the US and Canada were implementing impact fees for certain projects.

Furthermore, it was mentioned that Latin American countries were exploring additional development rights, and Japan and Germany were considering land pooling or readjustment.

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