TODAY -

Impact of road development on the rural economy of NE India

N Ram Singh *

NH-53 now rechirstened NH-37
NH-53 now rechirstened NH-37 :: Photo Courtesy - TSE



Transport and communication is the basic infrastructure for econornic development of a country. Highways and roads are regarded as arteries and veins of a State which are essential for sustainable economic growth. However, overestimation of the requirement and planning beyond the necessity of road transport would be delayed in the process of economic development of a region. The total road length of the NE region of India during 2001-2002 was 1,73261 kms against 2.4 kms per 1000 population of all India average.

The economic development of India and her northeastern region was sound during the plan period of 200l-2002 at GDP growth rate of about 8 per cent. The actual economic growth rate of the country has not been able to maintain after the expansion and extension of road transport since 2005-2006.

The country's road network consists of national highways, State highways, major district roads, other district roads and village roads. Out of the total length of national highways, about 30 per cent length is single lane/intermediate lane, about 53 per cent is two lane standard and the remaining 17 per cent is four land or more standard. Though national highways comprise only about 2 per cent of the total length of roads, they account for about 40 per cent of the total traffic.

National highways development project

The project is implemented by the National Highways Authority of India (NHAI). Phase I & II of NHDP envisaged 4/5 laning of about 14,330 kilometres of national highway, at a total estimated cost of Rs. 65,000 crore (at 2004 prices). These two phases, consist of the Golden Quadrilateral (GQ), the North-South & East—West corridors, Port Connectivity and Other Projects. GQ connects Delhi, Mumbai, Chennai and Kolkata. The North-South and East-West Corridors connects Srinagar in the North to Kanyakumari in the South and Silchar in the East to Porbandar in the West. Under the Port connectivity Projects, roads connecting 12 major port will be improved.

The main source of finance of NHAI for the implementation of various phases of NHDP is the fuel cess. The present rate of cess is Rs. 2.00 per litre on both petrol and diesel, a part of which is allocated to NHAI to fund implementation of NHDP. During 2008-09, an amount of Rs. 9,329.85 crore has been provided for the national highways and for state roads out of the same. Of this, Rs. 6,972.47 crore is for national highways and Rs. 2,171.64 crore for the state roads (including Rs. 500 crore from unspent balance of the previous years). An amount of Rs. 185.74 crore has also been allocated during 2008-09 for development of state roads.

Financmg of NHDP

The funds allocated from the cess are leveraged by NHAI to borrow additional funds from the domestic market. The Government of India has also taken various loans from the world Bank (US$ 1,965 million), Asian Development Bank (US$ 1,605 million) and the Japan Bank for International Cooperation (yen 32,060 million) for financing projects under NHDP. These multilateral loans are passed on to NHAI by the Government partly in the form of a grant and partly as loan.

NHAI also negotiated a direct loan of US$ 165 million from ADB for one of its projects. The funds provided to NHAI including the borrowings from the market are utilised for the projects and for servicing and repayment of borrowings from domestic market (Table)

Table: Financial structure of NHAI

Cess funds External Assistance Borrowings Budgetary
Grant loan support
2005-06 3,269.74 2400 500 1289 700
2006-07 6,407.45 1,582.50 395.50 1500 110
2007-0g 6,541.45 1,788.80 447.20 305.18 265
2008-09 6,9672.47 1,515.00 379.00 1,096.26 159
Source: Department of Road Transport & Highways

Special Accelerated Road Development Programme in the North Eastern region

The Special Accelerated Road Development Programme tor North-East Region (SARDP NE) aims at improving the road connectivity to State Capitals, district headquarters and remote places of NE region. It envisages two-four-laning of about 5,174 krn of national highways and two-laning/improvement of about 4,589 km of state roads. This would provide connectivity to 85 district headquarters to national highways/State roads.

The programme has been divided into the following two phases :
Phase A would include improving 2,619 km of roads consisting of 2,029 km of national highways and 590 km of State roads at an estimated cist if Rs. 16,286 crore. Of this, the Department of Road Transport & Highways (DoRTH), border Roads Organisation (BRO) and State PWDs have been assigned with the development of 1,795 km of roads. Out of this, 1,400 km of roads at an estimate cost of Rs. 4,285 crore has been approved for execution and the remaining 395 km has been approved lIin-principlell by the Government.

Improvement of the remaining length of 824 km of national highways IS to be done by inviting bids for construction works and balance length of 494 km will be taken up on BOT basis. Out of 1,400 km roads to be executed by DoRTH, BRO & State PWDs, projects' covering a length of 1,065 km at a cost of Rs. 3,378 crore has been approved till date and works are in progress.

The likely target date of completion for phase A is 2012-13.Phase B involves two-Ianing of 4,825 km of national highways and two-laning/improvements of state roads. Phase B is approved only for DPR preparation and investment decision is yet to be taken by the Government.The Arunachal Pradesh Package for Road and Highways involving roads of 2,319 km length was also approved by the Government.

Out of this, 1,472 km is national highways and 847 km is State/general staff/strategic roads.The high-powered inter-ministerial committee, set up to appraise and coordinate individual subprojects under SAHDP-NE, has approved sub-projects covering 1,065 km length at a cost of Rs. 3,378 crore, under phase A of the programme.Construction of rural mads under PMGSY

The Eleventh Five Year Plan has projected an investment requirement of Rs. 14,347 crore (at 2006-07 prices) in rural roads.

Table: Construction of rural roads under PMGSY

Year Length of road works completed(km) Expenditure (Rs. Crore)
2005-06 22891 4100.4
2006-07 30710 7304.3
2007-08 41231 10618.7
2008-09 52405 15162.0

During the first two years of the Eleventh Five Year Plan, an expenditure of Rs. 25,780.7 crore has been incurred on rural roads under PMGSY. Additionally, there are roads built by PWD and the Panchayati Raj institutions in the rural area (Table).Under PMGSY, the limited absorption capC:Jcity of states in terms of the number of programme implementation units (PIUs) at district level and at the State Rural Raods Development Agencies (SRRDAs) constrained the programme initially, but could be initially, but could be mitigated gradually.

Further, shortage of contractors is being felt is many states. Need-based relaxation in the binding capacity and packaging works has helped to overcome this problern to an extent. Besides, in the beginning, in some states, the personnel with the implementing agencies like the Rural Engineering Services, rural Works Departments, Zilla Panchayat Engineering Units and the Panchayat Raj Engineering Departments were not well equipped in road construction cornpared to their counterparts in the Public Works Department.

National Highways Development Project (NHDP)

About 27 per cent of the total length of national highways is single-lane/intermediate lane, about 54 per cent is two-lane standard and the balance 19 per cent is four-lane standard or more.

With a view to expediting the progress of the NHDP, the Ministry of Road Transport & Highways has set a target of completion of 20 krn of NHs per day, which translates to 35,000 km at the rate of 7,000 km per year during the next five years (2009-14). The NHAI formulated Work Plans (Work Plan I & II) forwarding 12,000 km each during the years 2009-10 and 2010-11.

These Plans lay down a specific timeframe for various activities and are being monitored very closely at various levels. Work Plan I (2009-10) covers balance stretches of NHDP Phases II, III & IV.

National Highways Development Projects (as in November 2009)(length in km)

NHDP Total Completed Under Balance for Component length 4 1ane implementation award of civil works
GQ 5,846 5,743 103 -
NS-EW 7,142 4,439 2,066 637
Port Connectivity 380 244 130 6
Other NHs 965 868 77 20
NHDP Phase - III 12,109 1,089 2,n4 8,306
NHDP Phase - V 6,500 148 886 5,466
NHDP Phase - VII 700 19 681
Total 33,642 12,531 5,995 15,116
Source: Ministry of Road Transport and Highways

After the last review of the road sector by the Prime Minster, a Committee (under Shri BK Chaturvedi, Member, Planning Commission) was set up. Based on the recommendations of the Committee, appropriate changes in RFQs, RFPs and MCAs are being considered by the NHAI. The NHAI is setting up 192 special land Acquisition Units (SLAU) in various States for expediting the LA process, which is identified as major bottleneck in the implementation of the projects. Seventy-two such units have already been set up.

Special Accelerated Road Development Programme in the North-Eastern region (SARDP-NE)

The SARDP-NE aims at improving road connectivity to State Capitals, district headquarters and remote places of the north-east region. It envisages two-four-laning of about 5,184 km of National Highways and two-laning/improvement of about 4.756 km of State roads. This will ensure connectivity of 85 district headquarters in the northeastern States to 2 National Highways/two-lane State roads. The programme has been divided into Phase 'A', Phase 'B' and the Arunachal Pradesh package of Roads & Highways.

The road development in NE India helps in the channelisation of market of all commodities throughout the region. Demand and supply determined the price level without affecting the cost of production. More and more men and women are involved in trading, transporting and other small business.

Role of multinational companies are also taking major share for increasing the volume of trade. On the other hand, the quantity of production in all sector are yet to be increased in proportion to the expanding road transport.

There are multi-facet problems and inconveniences in the northeastern hill region because of the recent implementation of road development project in N.E. Region. The major problems are :

  • About 20 lakh families are homeless because of eviction.
  • About 30 lakh families lost their traditional occupation.
  • All natural drainage systems are missing and blocked.
  • The levels of newly constructed highways are above the rooftops of most rural households, damaging valuable underground cable wires, water pipelines and electrict posts, etc.
  • The main business centres of the region are under the fly-overs.
  • The long National Highway above 7 feet from the general ground level creates an artificial dam in the valley area, creating large lakes during rainy season on either side of the highway. The main drinking water pipe lines of the towns and cities are destroyed in the process of construction of roads. Community ponds, fresh water lakes and fish farms are also damaged.
  • Animal grazing grounds and natural fishing grounds also vanished.
  • About 20 lakh small farmers have become landless.
  • Roads divide small clans and family life of rural society.
  • Most of the roadside farms and fresh water are polluted.
  • Thousands of century-old trees and fruit plants are up-rooted.
  • There were several cases of accidental death of man, animals including wild elephants, monkeys and leopards, etc. on the road.
  • There are cases of losses of many economically important trees and plants like teak, parkia, bamboo, arcanut, coconut and other fruit bearing plants because of large scale deforestation and changing local temperature.
  • Multiplication of transport vehicles on the road creates traffic jam and takes very long for all workers of the region. Motorism, overtime delay losses and over-consumerism of engines and electronics items are also alarmingly rising.
  • Shifting of occupation from their traditional experiences to newly available job complicates the lives of the rural people.
Policy Implications

Road development is important step for economic development. The development of road in proportion to the growth of the other sector like industry, agriculture and trade of the area is required for sustainable socio-economic development. The development in road and vehicle sector with a stagnant production and GDP growth would have adverse affect to the rural economy.

The main policies to be suggested for road development in the N.E. region are:
  • To develop natural drainage system according to the changing climate, i.e. cloud burst and heavy rainfall, etc.
  • To protect and preserve the wild animal’s footpath for the forest areas to save the accidental death of wild animals and to control man-animal conflict in the North Eastern India.
  • To develop rural road for bullock carts, footpaths, cycling roads for rural workers.
  • To control the number of vehicles according to the need and value of work.
Conservation of old trees, community parks, lakes, ponds and natural habitat of man, animals, fishes and other eco-friendly living objects, etc.


* N Ram Singh wrote this article for The Sangai Express
This article was webcasted on July 01, 2011.



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