Indian Transport Minister Nitin Gadkari
Image: Amit Verma
Talk to any foreign investor, and one of the things they are sure to point out is the relative improvement of the road infrastructure in the world’s most populous country. The connectivity of road and transport plays a critical role in business decisions, and over the past nine years, the total length of national highways increased by 59 percent to 140,679 km in FY23. “Now 40 percent of the country’s traffic is on national highway. The most important challenge for my ministry is how we are going to reduce the logistic cost,” India’s road transport and highways minister Nitin Gadkari says in an exclusive interview on Forbes India Pathbreakers.
In India, the logistics cost is around 14-16 percent, much higher than China (8-10 percent) and the US (12 percent). Clearly, there is much scope for improvement since only 2.6 percent of the total road length available is part of the highway network, Gadkari adds, “By making good roads we are definitely going to reduce the logistics cost.”
Traditionally, the roads sector has been riddled with a plethora of challenges. Many road developers burnt their fingers in the 2010s due to inefficient allocation of capital and ad-hoc delays in government approvals. The alleged lack of transparency in the awarding process did not ease matters. Gadkari says he revived the sector with an infusion of confidence and strategies to attract private players and address bottlenecks.
“When I took charge as a minister in 2014, we had 406 stalled projects worth Rs3.85 lakh crore. Before 2014, the work order was given before land acquisition, forest and environment clearances. After that, sometimes because of courts, environment ministry, or NGOs, there were a lot of delays. That was the reason for huge losses to companies,” Gadkari says. “My ministry saved Indian bankers from NPAs (non-performing assets) of Rs3 lakh crore. We terminated projects of Rs40,000 crore and for projects worth Rs3 lakh crore, every day, for many months, I held meetings with the contractors, engineers, officers, bankers, and with my positivity and transparency, we resolved the issues.”
Also read: We need to increase the speed of road construction: Nitin Gadkari
The Bharatmala gambit
In 2017, the government launched Bharatmala Pariyojana with the aim to connect 550 districts via the highway network by FY22. The project is expected to include the development of national highways length of 74,942 km at an estimated cost of Rs5.35 lakh crore. A parliamentary committee said the mega project is expected to be completed by FY27 and the cost is likely to jump to Rs10.63 lakh crore. Analysts believe the pandemic and hurdles in land acquisition have led to the delay. Meanwhile, the ministry of road transport and highways (MoRTH) is awaiting the government’s nod for Bharatmala Phase 2 which targets to connect 44 economic corridors and costs about Rs3.5 lakh crore.
Gadkari admits the speed of construction needs to increase and explains range of challenges.
“We are trying for that. But the way in which the system is working… my only worry is how to increase the speed of taking construction decisions and start work. Land acquisition is a big problem, the tender process is a problem. Getting environment and forest clearance is a problem. Railway clearance is a problem. There is a very lengthy procedure to get permissions. These are things where we need to improve the system by which we can make or give more orders for construction and increase the pace of construction. We don’t have a problem of resources, but we have problems where we need to increase speed,” he asserts. “The problems are there, but I always believe that there are some people who convert problems into opportunities and some people who convert an opportunity into a problem. Let us accept the problem as a challenge and convert it into an opportunity. To resolve the problem is the duty of the minister—it is my duty to resolve the problem and make the speed faster.”
According to the Ministry of Statistics and Programme Implementation (it monitors infrastructure projects of over Rs150 crore), as on August 1, nearly half of the country's 1,646 infrastructure projects—from roads to railways to airports—are delayed by an average of 37 months and 388 projects reported a combined cost-escalation of over Rs4.65 lakh crore till July. CMIE notes the delay was attributed to hurdles in land acquisition, forest or environmental clearance, lack of infrastructure support and linkages, supply of equipment, fund constraints, and geological surprises. Also read: Tesla wants some concessions: Nitin Gadkari
The Green push
Since mid-2000, Gadkari has been among the forerunners to champion the green revolution. He pushed the case for green energy and has been involved in several social projects to uplift farmers and tribal communities. “We need development, but we do not want to compromise with the ecology and environment. That is why we have the greatest priority for development of green India, green highway, green fuel and green cars,” he states. “At any cost before 2070, we need to make India carbon neutral. That is the dream of our prime minister. Ecology and environment have the highest priority.”
He points out that India imports fossil fuel of Rs16 lakh crore which can be reduced with the use of green energy. “We will encourage farmers for the diversification of agriculture towards energy and power sector which will increase the agricultural growth rate and create not only smart cities but also smart villages,” he explains. “We need to develop agriculture and rural India. We want to involve farmers for making ethanol, bio-CNG, bio-LNG. At the same time, we are making hydrogen from biomass and waste water using electrolyser. We are the number one manufacturer of electrolyser in the world. The way in which research is going on, we are confident that while we are currently the importer of energy, within 10 years, we will be an exporter of energy to the world. Green hydrogen is the future.”
Gadkari owns a green hydrogen car and is excited about the future of electric cars in India.
“Now there is a waiting list for electric vehicles. Four-hundred startups started manufacturing electric scooters. Bajaj, TVS, and Hero are already exporting 50 percent of their two-wheeler production. They are making electric scooters. This will totally change the scenario in the country. It will reduce pollution and cost. If you are paying Rs120/litre for petrol, for the same average in an electric vehicle, your cost will be Rs5. We are now making solar energy. Now people have a solar panel in their house or factory, and they are using energy in their factories, and also for charging their cars and scooters. This is the ideal picture and I feel it is the need of the hour because commitment to green revolution is very important,” he says.
Tune in to the full conversation on the inaugural episode of Forbes India Pathbreakers Season 2 to find out how Nitin Gadkari plans to speed up the completion of highway projects and push green energy to unleash India’s animal spirits to become the third largest world economy. Don’t miss the part where he talks about Elon Musk’s Tesla entering the India market. Coming up on September 6. Watch this space.