Drivers of Logistic in India-Roadways

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The Indian roads and highways sector has been a key driver of India’s growth story. With a network of over 4.1 million km, Indian roads carry about 60% of the total freight and 85% of total passenger traffic of the country. In the last 5 years, the total road network increased by about 0.8 million km from 3.32 million km at a CAGR of 4.4%, of which national and state highways network increased by 5,182 km and 26,522 km respectively. In addition, during this period, National Highways Authority of India (NHAI) alone awarded 19,568 km of projects for widening/rehabilitation on Public-Private Partnership (PPP) basis. NHAI has set an ambitious target of awarding 8,800 km of national highway projects in 2012-13, which is about 20% higher than in 2011-12. The next few years would see a significant increase in national highway capacity.

The Ministry of Road Transport and Highways (MORTH) estimated that Indian roads carried about 1.23 billion ton km (btkm) of freight traffic in 2011-12 and expects it to grow to 1.835 btkm by 2016-17 at a CAGR of 8.3%. According to the Planning Commission, production of auto sector is expected to go up from 20.3 million vehicles in 2011-12 to 35.08 million by 2016-17 at a CAGR of 11.50% in production alone. Are Indian roads equipped enough to handle this expected traffic surge? The answer may well be no.

Even today, an average distance covered by a truck per day in India is just 300 km compared to 700–800 km in the West. While NHAI and highway developers are changing the face of Indian roads, the ‘ground level factors’ are not changing. Congestion at toll gates, harassment of truck drivers by officials and local mafia, damaged roads, looting of truck drivers, fuel theft and the like continues on Indian highways due to continuation of inefficient mechanisms.

Road traffic capacity can be increased in two ways– increasing road capacity (by increasing length or width) or reduce stay time of vehicles on roads. Indian road length is not...
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