Indian roads still lack dragon’s finish

A comparison of road building in India and China over a decade long period reveals some interesting facts. Higher investment in the transportation sector and a greater emphasis on building arterial networks have made China pull far ahead of India in the 1992-02 decade, and the gap has been increasing since then.

The World Bank estimates that Indian expenditure on highways and railways averaged between $1bn and $3bn in 1992-02, or less than 1% of India’s GDP in the period. By contrast, China spent as much as $1,233bn on the transportation sector, or 3.1% of its GDP. The net result of all this is a sharp reduction in supply chain uncertainty in doing business in China — and that draws a lot more investment to China than to India.

The World Bank report notes that China has put a lot of emphasis on building arterial networks, while India has always concentrated on building up rural access roads, and in general neglecting arterial highways, which carry the bulk of trade. In fact, even as China’s road network only increased by 443,000 km, while India added 600,000 km, the ease of travel and connectivity is much better than in India. It’s only in this decade that the Golden Quadrilateral road network construction has gathered pace, and not a moment too late.

The other difference, the World Bank notes, is that the Chinese government has been savvy about financing this heavy expenditure on transportation. One-fourth of the expenditure on roads, equal to $308bn, was recovered through charging road users a fee. The different fees charged were road maintenance fee, vehicle purchase fee, and a highway transport management fee. China also charged $2.5bn by way of highway transport management fee in ’02. China has encouraged partnerships with the private sector. The World Bank says, nearly 10% of the total funds raised was from public-private road network partnerships with a further $11bn raised from the private sector. The net result is a strong buy-in by stake holders, industry, government and people into making the infrastructure work.