Home / Economy / The multiplier impact of more expressways

With the inauguration of the 246-km Delhi-Dausa-Lalsot section of the Delhi-Mumbai expressway last week, the travel-time between Delhi and Jaipur is expected to come down to three hours. There are other economic implications. Mint explains:

How’s India doing in highway construction?

The total road network in India, second largest in the world, spans over six million km. This comprises all categories —national and state highways as well as urban and rural roads. Construction of national highways (NHs) has risen consistently. There are 663 NHs and their total length has increased from about 91,287 km in March 2014 to about 144,983 km at present. Bharatmala Pariyojana, India’s largest infrastructure programme, envisioned in 2017, aims to develop 34,800 km of NH corridors at an estimated cost of 5.35 trillion. As of now, 11,789 km has been completed in the project.

What is the Delhi-Mumbai expressway?

The Delhi-Mumbai expressway is counted among the most advanced in the world. It is expected to halve the commute time between Delhi and the country’s financial hub, Mumbai. Development of an excellent physical infrastructure i.e. road, railways, ports, airports etc. along with digital connectivity, is known to be the engine of growth and development for any nation. Since this expressway will lead to better connectivity, it could create opportunities for logistics, storage, transport and other related industries as well. Infrastructure development also results in multiplier-benefit for the economic regions around.

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Photo: Mint

Will the expressway boost tourism?

There is a renewed focus on boosting domestic tourism. Good infrastructure along major tourism hubs will help. Tourist spots such as Ranthambore, Jaipur, Ajmer, Sariska and Keoladeo National Park are expected to benefit. Tourism has a multiplier impact: Gramin Haats along the expressway can provide local farmers and craftsman a new window of opportunity.

What is the effect of infra investment?

Capital expenditure is known to have a powerful multiplier effect of approx. 2.95 times. Infrastructure investment projects generate demand for raw material while inputs such as coal, steel, cement, heavy machinery etc, create employment opportunities in infrastructure-related industries. It also results in social infrastructure development for people living around highways, including education, healthcare, buildings for public use, shopping complexes etc. which can pave the way for businesses to flourish.

What should be the focus of policy?

Reviewing the Land Acquisition Act 2013 to make it investment friendly and, at the same time, not hurting the interests of the original land owners, is required. Transparency and a more effective process flow in land acquisition is a need. Recovering the cost of service in terms of building the highway, and its maintenance, are crucial. And regulatory authorities that can provide inputs for highway usage tariffs should be set up.

Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH

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