After Independence in 1947, India adopted socialist policies and had meagre growth rate of 3.5 per cent. All this changed when India opened its gate to reforms in 1991, which accelerated the growth to 8 %. During this period the policy makers stressed on the importance of infrastructure development and highway development got precedence. To increase the road transportation network in India National Highway Authority of India (NHAI) was setup.

Along with improving the existing highways, NHAI embarked its journey with two iconic projects: The Golden Quadrilateral (GQ) and North-South East-West Corridor that were aimed at covering length and breadth of India. The phase I and phase II of the project aimed at construction and up gradation of 13,146 km of national highways into 4 to 6 lanes.

The major challenges facing NHAI were

Financing of projects: The long gestation period and uncertain future cash flows make it very difficult to avail finance for project. To solve this problem a lot of finance models like BOT, EPC etc., have been tried. But the satisfactory solution is yet to be reached.

Land Acquisition: According to the law the land has to be valued at prices on the date of notification and the compensation has to be paid accordingly. However, this had led to wide spread criticism and protests from land owners. The government has been dragged into a number of disputes pertaining to land acquisitions

Coordination among ministries: In India getting approvals for infrastructure projects requires a close coordination between various central, state and local municipal levels. It involves coordination amongst all these parties and leads to delay in getting project approved.

Change of government and its priorities: Due change in government there has been a gradual shift of focus from infrastructure to rural development, leading to lack of finances and focus that ultimately led to delay of projects

To overcome these challenges a lot of changes are required by government to keep steady growth of highway development in India.

National Highway Authority of India

India had its tryst with destiny on 15 August 1947 when it got independence after almost 200 years under British rule. India started its process to build up the nation then by adopting the policies of socialism, planning commissions. However it was marked by red tapes, controls, bureaucracy hurdles, and government intervention. For almost 40 years India grew at a slow pace of 3.5% which is now called Hindu rate of growth. In 1993 India dwelled into a new path to growth. The markets were opened; liberalisation and globalization were the words of the day. However India could never become the success story which it became without revamping its decades old transportation infrastructure. India was now growing at a modest pace and to make sure that the growth levels are increased and maintained it became imperative that the logistic infrastructure be improved.

Recognizing these threatening problems India under the rule of NDA (National Democratic Alliance with the BJP as biggest party in the alliance) with the aegis of the then prime minister Atal Bihari Vajpayee announced a massive project to revamp its infrastructure. It was called “National Highway Development Project” which paved the path for a new era of growth.

Introduction

National Highway Development Project was implemented in 1998. It planned to widen, rebuild the national highways of the country which accounted for less than 2% of the total road network in India but carried about 40% of the road traffic. Road density in India is among the lowest at 2.75km per 1000 people and 770 km per 1000 sq. km compared to 6.7 and 841 resp. (TCA Anant, 2008)

The phase I of the project was called the Golden Quadrilateral (GQ) Project. Subsequently seven more phases have been launched and the project has been extended to cover all the important hubs, ports to this national highway grid.

The Project

The agency responsible for implementation of NHDP was National Highway Authority of India (NHAI). It is a nodal agency governed by the Ministry of Road Transport and Highways, Government of India. The phase I and phase II of the project aimed at construction and up gradation of 13,146 kM of national highways into 4 to 6 lanes. The golden quadrilateral project and the north south and east west corridors were part of these phases. Golden quadrilateral project aimed at improving road connectivity between the four metropolitan cities of India namely, New Delhi, Mumbai, Chennai and Kolkata. Other major towns like Ahmedabad, Surat, Vishakhapatnam, Pune, and Bengaluru were also supposed to be a part of these national highways. East west corridor connected Silchar in east to Porbandar in West. North south corridor connected Srinagar in north to Kanyakumari in south. Phase III plans to integrate the state capital and major economic hubs with the NHDP I and II and total 12,109 km of highways will be upgraded in this phase. In phase IV around 20,000 km of national highways will be constructed and upgraded. These are majorly the highways that were not a part of phase I, II and III. Phase V envisages to upgrade 5000 km of 4 lane roads into 6 lane roads. The government still has to decide which sections of the highways will be upgraded in this phase. Phase VI plans to construct expressways in India on BOT basis. These expressways will connect major industrial towns of India. Phase VII plans to build bypasses, flyovers, ring roads to increase road network in cities to national highways.

Economic Impact

As the various projects were launched there was a rapid rise in the creation of jobs. There was also a huge employment generation in both skilled and unskilled sectors. During the phase I around 250000 persons per day were required or around 40 persons per km per day. (www.nhdp.org). Various sectors like steel, cement industry and equipment manufacturers saw high growth rates during the period. As per figures from press information bureau, Government of India growth rate in cement, steel and commercial vehicles were 8.1%, 6.8% and 55% respectively Source: nhdp.org.

There was a direct correlation in the progress of the project and the GDP growth. By the time the phase one was nearing completion India was clocking a GDP growth of more than 8% consistently. According to World Bank the annual benefits the annual benefits were around Rs 8000 crore [1] on the GQ project itself.