India to stimulate sluggish economy with $108bn road building programme

The government of India has announced that it will spend $108bn on 83,700km of road construction schemes over the next five years.

The plan comes at a pivotal moment in Narendra Modi’s tenure as prime minister as he plans his re-election in 2019. During his previous campaign, Modi pledged to build 41km of roads each day, a target that has not been achieved.

Until this year, India was the fastest-growing major economy in the world. It has now fallen behind China, and is responding using the Chinese remedy of bolstering domestic demand with increased infrastructure spending.

The National Highway Authority of India, the National Highways and Infrastructure Development Corporation and other public work departments will carry the schemes forward, and create 142 million work days in the process, according to the government.

The road building push includes 34,800km of construction as part of the Bharatmala Pariyojana, an $83bn scheme that was launched in 2015.

The aim of Bharatmala is to link India’s east and west as well as improving communications with rural areas.

Modi said the projects would create a base for infrastructure development, and allow a motorist to make a continuous journey across India.

Vinayak Chatterjee, chairman of infrastructure services company Feedback Infra, said: "The road sector has one of the highest economic and employment multiples in the country. In that sense, this is possibly the best stimulus that we can get."

Recently, Modi announced a $2.5bn scheme to give every Indian home electricity by 2019.

Image: A road in north India (Wikimedia Commons/Anurag Agnihotri)

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