In a veiled criticism of the previous National Democratic Alliance government, the pre-Budget Economic Survey asked the Centre to shift its focus on road and highway construction from pre-inauguration activities to comprehensive corridor management.
"The major questions that need to be addressed in the roads sector are about a shift in focus from inaugurating roads to comprehensive corridor management which can maximize the velocity and throughput of the highways," the Survey tabled in Parliament, said.
Constructing high velocity corridors "may require a fresh set of institutional innovations and organisational structures as compared with the existing efforts which are focused on pre-inauguration activities," it said.
"The goal must be to get up to sustained performance of 100 kmph, so that the drive from Mumbai to Delhi can be realistically achieved within 13 hours of continuous driving."
"The impact of new roads upon India's GDP is obtained when high sustained velocities are obtained for a large number of vehicles," it said calling for high efficiency in tolling, maintenance, continual performance analysis and incremental highway engineering work, enforcement against encroachment and customer facilities on the roads.
The Survey said owing to delays in project construction, the full economic impact of the array of road projects announced are yet to come.
The expenditure of the ambitious National Highway Development Project since 1998-99 has built up to 0.33 per cent of GDP. "This illustrates the lags that may separate policy decisions to create new institutional mechanisms, and their full impact on investment/GDP ratio."
While Rs 9,525 crore (Rs 95.25 billion) was spent on NHDP in 2003-04, about Rs 25,000 crore (Rs 250 billion) of capital expenditure over 2004-05 and 2005-06 at National Highway Authoity of India is projected.
"While NHAI led to a rise in the investment/GDP ratio in 2001-02 and 2003-04, and thus played an expansionary role in those years, a comparable impact on investment is unlikely in 2004-05 and 2005-06," the Survey said.
It said while NHAI revenues are mostly derived from fuel cess, there was a rapid growth in tolls, from Rs 85 crore (Rs 850 million) in 1999-2000 to Rs 371 crore (Rs 3.71 billion) in 2003-04.
The funding model of NHAI was once viewed as being dominated by the fuel cess. However, in 2003-04, tolls were roughly one-fifth of the income from the fuel cess.
"The outlook for further growth in user charges in the form of tolls is bright, given the steady completion of NHDP, and the nationwide acceptance of the principle of tolling as the necessary price of high quality roads," it said.
"These developments mark an important new phase in Indian infrastructure. The road sector demonstrates that significant revenues can be obtained through user charges to improve infrastructure and benefit the consumer," the Survey said.
The pre-Budget document said fund requirement for the Pradhan Mantri Gramin Sadak Yojana is now estimated at Rs 1,32,000 crore (Rs 1,320 billion) as against the previously estimated requirement of Rs 60,000 crore (Rs 600 billion).