Govt announces highest capex in highways, economic corridors in poll-bound states

Union finance minister Nirmala Sitharaman on Monday announced an enhanced outlay of ₹1.18 lakh crore for the ministry of road transport and highways. Of the total amount, ₹108,230 crore, the highest ever, has been designated as capital expenditure (capex). She also announced a slew of highway projects and economic corridors in the poll-bound states of West Bengal, Assam, Tamil Nadu and Kerala, all of which are worth over ₹2.12 lakh crore.

The states are expected to hold assembly polls around April or May this year.

“To further augment road infrastructure, more economic corridors are also being planned. Some are: 3,500km of National Highway works in the state of Tamil Nadu at an investment of ₹1.03 lakh crore. These include Madurai-Kollam corridor, Chittoor-Thatchur corridor. Construction will start next year. About 1,100 km of National Highway works in f Kerala at an investment of ₹65,000 crore, including a 600km section of Mumbai-Kanyakumari corridor in Kerala,” she said.

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“About 675km of highway works in the state of West Bengal at a cost of ₹25,000 crore, including the upgradation of the existing road from Kolkata to Siliguri. National Highway works of around ₹19,000 crore are currently in progress in Assam. Further works worth over ₹34,000 crore covering more than 1,300km of National Highways will be undertaken in the state in the next three years,” she announced.

“Within infrastructure, the Budget has highlighted strategic projects like select road and railway stretches in states like Tamil Nadu, West Bengal, Assam etc. many of which are part of existing economic corridors like the East Coast Economic Corridor, Delhi Mumbai Industrial Corridor etc. Some of these projects are likely to have a disproportionate impact on overall GDP growth by virtue of them featuring in some of the key trade and logistics routes and being located in states which have significant upside in per-capita GDP,” said Arindam Guha, partner and leader, Government and Public Services, Deloitte India.

The finance minister in the previous fiscal had allocated ₹81,974.71 crore (budget estimate) which was revised to ₹92,053.17 crore.

Sitharaman said over 13,000km of roads, at a cost of ₹3.3 lakh crores, have already been awarded under the ambitious ₹5.35 lakh crore Bharatmala Pariyojana project, of which 3,800km have been constructed thus far. By March 2022, the Centre plans to award 8,500km and complete an additional 11,000km of national highway corridors.

“The government has allocated ₹5.54 lakh crore for capital creation in the infrastructure sector. The transport sector has received a fair share of allocation in the budget with new economic corridors being planned to boost highways and railways sector. The government has also allocated ₹1.18 lakh crore for the roads and highways sector and ₹18,000 crore for the public transport in this year’s budget. About 8,500km of road and highway projects, including the new road corridor projects, are being planned to be awarded by March 2022. The railways have seen a significant allocation in this year’s budget with a total allocation of ₹1.1 lakh crore, mostly on the capital expenditure including the railways corridors. The National Rail Plan 2030 to create a future-ready railways system will be critical for boosting and bringing investment in the railways sector,” said Abhaya K Agarwal, partner, strategy and transaction, Infrastructure & Government and Public Sector, EY India.