Road building target is challenging

Reacting to the Budget announcement of an  expansion of the national highway network by 25,000 km during FY2023, Sandeep Singh, managing director, Tata Hitachi believes the target will not be easy to achieve considering the present execution levels which stands at just about 7,000 km until December 2021 even though efforts are being made to stretch it to 10,000-12,000 km by end of current fiscal.

The original plan was to construct about 14,600 km of road during FY2022.  He added that  even if the execution level reaches the 15,000 km mark out of the targeted 25,000 km , it should be considered satisfactory by the construction equipment industry. 

Singh who is also the past President of Indian Construction Equipment Manufacturers' Association (ICEMA), an industry body pointed out  delays in land acquisitions, environmental clearances and liquidity issues arising out of tightening lending norms by NBFCs beginning January 2022 are some of the key reasons for slowdown in the road and infrastructure sector.

The situation is in contrast to FY2021, when despite the pandemic, a total of 13,298 km of road construction could get completed on the back of massive infrastructure spendings by the government. The average daily road construction currently stands at about 22-23 kms as compared to about 35 kms earlier.  

The Economic Survey report released on 31 January says that the country's total  road network stands at about 63.71 lakh km as on March 2019, which is second-largest in the world after the USA which has 66.45 lakh km of roads.   In order to achieve a GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion over these years on infrastructure. During FY 2008-17, India invested about US$1.1 trillion on infrastructure. However, the challenge is to step up infrastructure investment substantially. Keeping this objective in view, National Infrastructure Pipeline (NIP) was launched with projected infrastructure investment of around Rs 111 lakh crore (US$ 1.5 trillion) for the period FY 2020-2025.

Continuing on its push for infrastructure development, the Budget provides for   further penetration by way of  har ghar jal yojna- a scheme for providing drinking water to every home, PM GatiShakti Masterplan plan for Expressways  amongst others which  may end up providing an upswing to the construction equipment industry beginning next fiscal. "If they really execute well , it will be good for us," Singh said.