ICRA predicts 5-8% rise in India's road construction 2024/25

19 Apr 2024 CW Team

ICRA, the Indian arm of the Fitch ratings agency, stated that India is anticipated to maintain its current momentum in road construction. They projected an addition of up to 13,000 kilometres in the 12 months through March 2025, marking an annual increase of 5-8%.

According to government estimates, under Prime Minister Narendra Modi's tenure since 2014, India has constructed approximately 90,000 kilometres of national highways, nearly double the amount built in the preceding decade.

Modi is touting road infrastructure as a significant achievement in his campaign leading up to the general election, which commences with voting.

The capital expenditure on roads surged to Rs 2.4 trillion in 2022/23 from Rs 510 billion in 2013/14.

Despite a sluggish start last year due to heavy rains in certain regions of the country, road construction has gained pace since September. ICRA mentioned in a statement that this momentum is likely to persist.

ICRA stated, "The pace of execution in this fiscal year will be supported by a healthy pipeline of projects, increased capital outlay by the government, and a focus on project completion."

Vinay Kumar, vice president and sectoral head of corporate ratings at ICRA, noted that the government's project award pipeline stands at over 45,000 km, indicating robustness, despite delays in cabinet approvals for revised cost estimates.

To offer temporary relief to millions of motorists, truckers, and commercial vehicle owners, the government postponed a proposed hike in road toll charges for about two months earlier this month.

India's road transport minister has set a target of constructing more than 35 kilometres of roads per day in the current fiscal year.

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