Each rupee invested in India’s highways led to Rs 3 rise in GDP: IIM-Bangalore study

New Delhi:  Investments made in India’s highways sector have translated to a more than three-fold increase in the country’s GDP due to the multiplier effect resulting from the creation of more jobs and incomes in the economy, according to an IIM-Bangalore study.

The research study said that every unit of expenditure on highway construction has contributed to a 3.21-unit increase in the country’s Gross Domestic Product (GDP).

According to the study, conducted from 2013 to 2022, national highway development has led to a 9 per cent increase in household incomes, a 6 per cent rise in household expenditure, and a double-digit surge of 10.4 per cent in car sales.

It also highlighted that the development of highways in the country has led to a close to 3 per cent reduction in transportation costs between factories and sources supplying raw materials and by 1.33 per cent between factories and customers that buy the finished products, reflecting an improved efficiency in the supply chain.

The study pointed out that the new highways have given a fillip to the agricultural sector and MSMEs (micro, small and medium enterprises) which account for a major share of employment in the country.

The study done by IIM Bangalore’s Supply Chain Management Centre in collaboration with the National Highways Authority of India (NHAI), evaluates the socio-economic impact of national highway expansion.

The development of the highway network has also increased accessibility to schools, higher education institutions, essential healthcare services, and community services, according to the report.

Besides, there has been a reduction in crime rates, accidents, pollution, noise levels, and traffic congestion in regions where the highways have been developed.

The study has been based on comprehensive surveys and analyses conducted across more than 100 districts, including varied socio-economic conditions.

The National Highways Authority of India spent a record Rs 2.07 lakh crore on the construction of national highways in 2023-24, the highest ever capital expenditure so far, and a jump of 20 per cent compared to Rs 1.73 lakh crore spent in 2022-23 and Rs 1.72 lakh crore in 2021-22.

According to official figures, the length of India’s National Highway network has surged by 60 per cent in the last 10 years from 91,287 km in 2014 to 146,195 km in 2024, making it the second largest road network in the world.

In a landmark achievement, National High-Speed Corridors have also increased from a mere 93 km in 2014 to 2,474 km in 2024, which reflects the quantum improvement in the country’s infrastructure.

–IANS