Reviving Road Awards: Crisil Highlights Challenges and Opportunities

Crisil emphasizes the importance of accelerating highway project awards due to delays caused by land acquisition issues and prolonged approval processes. Despite robust capital allocation, road sector growth is restricted. It suggests government efforts to resolve bottlenecks and boost asset monetization to propel the industry forward amid economic growth potential.

Crisil, a domestic rating agency, has stressed the necessity to reinvigorate the pace of highway awarding, citing key hindrances such as encumbrance-free land non-availability and an elongated approval process. Despite a healthy capital scenario, these bottlenecks are limiting growth in the road sector.

The awarding activity in roads dropped significantly from over 12,000 kilometers in FY23 to below 8,000 km in FY25. Union Roads Minister Nitin Gadkari previously acknowledged the issue, linking higher spending to economic growth. The report forecasts a gradual recovery in project awards due to government initiatives to unlock these challenges.

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). Despite global economic uncertainties, a projected 45-50 percent infrastructure investment increase over two years is expected, driven by strong policy support and demand.