India's Road Sector Growth Halted by Bottlenecks, Says Crisil
Crisil, a domestic rating agency, has highlighted the need to revitalize the pace of highway awarding, citing key obstacles such as the unavailability of encumbrance-free land and an extended approval process.
Despite a thriving capital scenario, these hurdles are constraining growth in the road sector. The awarding activity in roads plummeted significantly from over 12,000 kilometers in FY23 to below 8,000 km in FY25.
Key Challenges Facing India's Road Sector
- Encumbrance-free land non-availability
- Lengthy approval process
Government Initiatives to Unlock Road Sector Growth
Union Roads Minister Nitin Gadkari previously acknowledged the issue, linking higher spending to economic growth. Crisil forecasts a gradual recovery in project awards due to government initiatives to address these challenges.
Infrastructure Investment on the Rise
Crisil also noted expected momentum in asset monetization, with Rs 70,000-80,000 crore in assets, to be monetized by the National Highways Authority of India (NHAI). A projected 45-50 percent infrastructure investment increase over two years is expected, driven by strong policy support and demand.
Key Statistics
- Awarding activity in roads dropped from 12,000 km in FY23 to below 8,000 km in FY25
- Projected 45-50 percent infrastructure investment increase over two years
- Rupees 70,000-80,000 crore in assets to be monetized by NHAI
Infrastructure growth is expected to pick up over the next two years, driven by strong policy support and demand.