India’s Road to Prosperity- The Road Less Travelled

Abstract

India’s road to prosperity lies in improving the road connectivity between urban cities and rural villages. As the Indian government is not in a position to fund the massive expenditure required in constructing the roads NHAI (National Highway Authority of India) has been constituted to rope in the private sector in national highways construction. Over a period of time EPC ( Enginering, Procurement and Construction) models have been dominated by PPP (Public Private Partnerships) models so that the government takes care of the allotment of the land and according the necessary approvals whereas the private sector assumes the responsibility of national highway construction, financing , maintenance of the national highways. However, PPP models are confined to national highways and state highways and the attempts of the government to propagate PPP models for district and village road construction has not made much success due to the reason that the contractors cannot levy toll charges for district and village roads due to various factors. This paper attempts to explore the possibility of constructing district and village roads under PPP models wherein collection of revenues from the general public is made possible through an innovative approach by going for solar power roads. The paper also suggests introduction of innovative financial products in order to augment the long term resources needed for road construction and cites two specific financial instruments in this regard.