ROAD DEVELOPMENT IN INDIA

abhishreshthaa

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The 20 year Road Development Plan (1981-2001) has envisaged a need of 66,000 km long NHs and 1, 45,000 km long SHs network by the year 2001. There is also a need of 10,000 km long Expressway network by the year 2015.


There is a need to upgrade the road system in the country by widening and strengthening the existing highways, reconstruction and widening of bridges and provisions of user friendly improvements.


In recent times the government of India laid great emphasis on the development of adequate road network in the country. A vision of expressways connecting far corners of the country has been projected. These projects may cost more than Rs. 25,000 crore (nearly US $6 billion).


It is obvious that this vital infrastructure requirement would have to be developed with the private sector's participation. Presented below is an overview of the government's policy towards roadways.


India has finalized Investment Promotion and Protection Agreements (IPPAs) with over 30 countries. Therefore, setting up of a joint venture or a 100% foreign owned subsidiary qualifies as an investment under the IPPAs which offer free transferability repatriatibility of funds, and provide for an elaborate dispute settlement mechanism and protection against expropriation.


Moreover, India enjoys Article 8 status of the IMF under which no restrictions are imposed on current account transactions. All payments under construction contracts are current account transactions and are accordingly freely permitted.


The government has recently announced a series of far-reaching measures to promote investment in roads. These measures include industry status to road sector, exemption from import duty on identified high quality construction plant and equipment, duty free import of bitumen permitted under OGL, automatic approval for foreign equity up to 74 per cent and foreign commercial borrowing to the extent of 30 per cent of the project cost has been permitted.
 
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