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Despite the Covid-19 pandemic, National Highway Construction Hits Record Highs in 2020-21. How did the plan pan out to be virtuous?

As the Fiscal Year 2021 rolled out towards its ending, it finished on a high note as India topped the road construction projection for the year. The startling news turns out to be a sky-high prospectus for the commencement of the new fiscal year. The government’s confidence uplifted as they achieved the targets accomplished, even though the initial phases rescinded construction due to the nationwide lockdown. The Ministry of Road Transport and Authorities surpassed the targets for highway construction for the fiscal year 2021. MoRTH constructed about 13,000 Km of national highways during the financial year that ended on March 31. The progress in transportation will be the line-up of the next few years. The construction of the road network would see generative revenues for the government authorities. Thus it prospers the economy’s motive to reach the pre-pandemic levels of GDP Growth by FY22. The clock ticked, and the achievement got lauded as one of the most defining moments in the crumbling times. The progression was 11,000 km more than the target for the previous fiscal.

So what made the government go ahead with the plan so efficiently, the question of many intriguing political leaders across the Parliament. The slew of relief measures could be the dominant reason that the government exceeded its target. Despite the discordant state of affairs, the plan exhibited a reduction in cash conversion cycles which enhanced performance guarantees. Union Minister Nitin Gadkari said on Friday that India now holds the record for the fastest road construction. He hailed the achievements by India in just over a month. He claimed that India made it to the Guinness World Record by building a 2.5km four-lane concrete road within 24 hours. The government efforts like providing bank guarantees to contractors helped with steady cash flow. The injection of the cash flow enhanced the production capacity.

The stringent efforts behind the accomplishment of the aim

Over the past year, industries got coerced towards a complete shutdown, and it contracted the growth of the Indian economy. The state of affairs got the better of the Indian citizens, and there looked no signs of progress until August 2020. In the aftermath of the Covid-19 pandemic, the shutdown rescinded traveling across state road link networks. The government enlightened the vision of expanding the highway network across the Indian States. The government decided to revamp the formulation of milestone billing (45-75 days) to monthly billing and release of retention money or preliminary deposit when the work got executed.

Economic activities were under the cosh of the strictest lockdown across the world. The lockdown did not affect much of the construction-related services due to its occurrence around the monsoon season. The activities regarding groundwork do not have a lot to conspire during hefty precipitation periods. Gradually, the Indian economy gathered its tempo back from August to September. The timeframe became a bolstering period for the National Highway Authority of India. The officials started to hire contractors and assign them the consignment. Around 13,000 km got built over six months, which gets overseen as the swiftness scheme under any regime in India.

How did the Ministry manage to mitigate the effects of the lockdown and exceeded the fiscal target?

Road contractors were left astonished by the swiftness in the conversion of cash cycle by the Ministry and NHAI. It allowed them to make special arrangements to facilitate the return of labor. The instructions laid down by the Union Minister and National Authorities of India opened the pathway for many contractors. In February, Patel Infrastructure Limited, a contractor of the National Highway Authority of India(NHAI), created a world record by constructing the outlay of the four-lane highway within 24 hours. The progression was observed as an evolution in the thought process of the Ministry and the government. The goal that was far-fetched by a single contractor soon become the ambition of thousands of contractors across India. Cash Cycle acts as a simulator in the whole process, as without the guarantee of cash flow, the consignment does not move forward. The labor markets get disrupted as the cycle works on a daily promise of wages. Henceforth, the contractors with financial security behind them started the construction activities in full flow and exceeded the target for the Fiscal year 2021.

Another NHAI contractor completed a single lane of the four-lane highway stretch of 25.84 km being developed between on Solapur-Vijapur in 18 hours. The speculation around the deal was that the construction got the nod from a Hyderabad-based company IJM India. Nitin Gadkari, at a press briefing, hailed the efforts of the contractual workers. Around 500 contractual workers were working their socks off for this project. The next part of the article would enlighten you about how the vision got prosperity despite the difficult times.

Despite the economic activities put on hold, how come Modi’s government action plan falls in the perfect place?

Since the Modi Government came into power in May 2014, it has pivoted towards the highway sector. The average per-day figure for road construction has been around 25 km. The heavyweight funding in the borough has proved to be the roadmap of many success stories. What has changed over the past year, and how have figures set the world record of 36.4 km per day? The plight oversaw a roller-coasting ride that had more positive turns, and that’s why it turned out to be the most propelling improvisation in 2020.

Between 2014-15 and 2021-22, the overall expenditure on national highway construction has increased from Rs 38,867 crore to Rs 1,83,101 crore. The covid-19 pandemic was a significant obstacle in the process as the plan got put on hold. Road Secretary Giridhar Aramane reconciled the efforts of the contractual workers amid the uncertainty of the year ahead. He asserted that when the lockdown happened, the government was preparing policies for the upcoming FY 2021. Almost for two months, no construction took place at the sites. Overcoming obscurity became the talking point in the industry, and finally, they reap their rewards today.

NHAI

The writing of higher road transportation seized a throwback.

The sky-high construction rates got cited as the preamble of the previous NDA government. The precursory NDA rule was back in 2007 and led by Shri Atal Bihari Vajpayee. His government also sighted its primitive focus on upraising highway-related services. The foot didn’t go off the pedal, and the significance was seen in the outcome. The Modi Government’s action plan was remnant to the one amended in 2007, and it looked like the Prime Minister was following in the footsteps of the great politician. But what was unprecedentedly obvious is that both the personalities had different circumstances and charisma, and hence the impact they had on the Indian economy differs in results. In the latest storyline, whenever the Modi Government would hit a new low in the political disclosure by peddling misinformation of the existing Congress leaders, we would recall the time of the respected leader Vajpayee, who truly dignified his opponent and allowed dissent. Vajpayee’s stature was a magnifying one, and nobody could ever step in his shoes and fill the void. The real question is- has the recent accomplishment by the Modi government showcased the formula to carry Vajpayee’s legacy? The growing impromptus on the infrastructure industries have been in the highlights since the lockdown.

3951 km highways constructed in apr sept ministry

The Infrastructural Upswing in India, How was the Foresight Laid Down?

The government realized that India’s post-pandemic economic recovery would be led by splurging their finances on the infrastructure sector. The message got conveyed to the National Highway Authorities of India, and the contractual workers started the recruitment of capital resources indispensable for the colossal proposal. However, despite clocking the results of 36.4 km per day, it was presumably lower than the 40 km per day target set by Road Transport and Highway Minister Nitin Gadkari in 2017. Knowing about why there has been a linchpin on the infrastructure sector become indispensable.

The government had put gigantic infrastructure projects in place for better road connectivity across States. But is it justifiable when contrarily, the government reveals its assets to private powerhouses? On March 16, 2021, Railways Minister Piyush Goyal said that the nation could progress towards sustainable growth only when the public and the private sectors work together at the forefront. On the frontier, he claimed that the Railway Network would never get privatized but welcoming private investments on the other, a visible contradiction on the government’s part. The sizeable speed of road construction has become the benchmark for India’s infrastructure creation. The large conglomerates and several industries got weighed down by massive debt, and the onus of the infrastructure creation was solely the government’s responsibility. Despite the strict restrictions, the government eased down the policies for the game-changers of the markets. Hence they could deliberately lend their support towards highway construction.

THE CRITICAL ASPECTS THAT HELPED THE CENTRAL GOVERNMENT EXCEED ITS TARGET

The government’s promptness in clearing dues and making timely payments helped the construction’s cyclic movement to undergo smoothly. Facilitation of payments to the contractors helped contractors with better cash flow to finish projects on time. As the lockdown eased out, the traffic on national highways recovered to pre-pandemic levels. While the air and the rail networks remained sluggish, road transportation remained the only available public transport in India during the pandemic. The Ministry was able to ramp up the road infrastructure project ahead of the deadline. All the fund-related challenges of the contractors got addressed by the Ministry. The contractors, in turn, needed to mobilize construction workers to outline the project. The contractors stood firm on their stance to accomplish the government’s vision. The vision was to transform the picturesque of highway transportation.

Union Minister Piyush Goyal insisted that it a colossal step in the futuristic demand for infrastructure in India. Following the success of the current infrastructure project, the Ministry of Road and Transportation decided to expand its targets for the forthcoming year. Although the pandemic had its toll on the infrastructure sector, the private sector stepped up and provided significant cash flow injections to enhance construction acceleration. The expectation by the citizens is to ease road transportation as the concerns mobbed up in traveling through air and railway channels. If transportation gets privatized in the foreseeable future, the private sector could handle all the mobilizations accordingly. But seeing the trends this year, it is less likely the government opts out of high stakes. The complicated factor is without the accessibility of private investment, the government could not fulfill such targets under any circumstances.

 

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Tanish Sachdev

Tanish seeks new opportunities as a professional content writer and writes on several fundamental topics like businesses and economics. The focal point remains on expressing opinions on critical aspects concerning the economy.

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