Kurukshetra Magazine May 2022 - 2 | Monthly Yojana & Kurukshetra Magazine (English) - UPSC PDF Download

 Page 1


Kurukshetra      May  2022 24
n any country roads act as the 
arteries through which the blood of 
development runs. By linking producers 
to markets, workers to jobs, students 
to school, and the sick to hospitals, roads are 
vital to any development agenda. Improved 
road infrastructure not only increases growth 
of an economy, it as well ensures the growth 
to be inclusive and sustainable. Developing 
physical infrastructure like road network and 
transport facility play significant role in changing 
socio-economic condition and standard of 
living of people of a region or country. Physical 
infrastructures like roads have multiplier effect 
on economic development of the region and 
standard of living of people.  A wide range of social 
and economic impacts can emerge from rural 
road development, from physical connectivity 
improvements (i.e., shorter distances and travel 
times) to long-term economic impacts, such as job 
creation and welfare improvement. Adam Smith 
realised the importance of access to mobility and 
transport, as he pointed out that providing greater 
Dr. Debabrata Samanta
Roads are vital in any development agenda. National Highways play significant role in transforming rural areas though better 
access to health and education, transforming agriculture, land use and nature of employment opportunities. The current 
development paradigm in India indicates pushing forward economic growth though development of physical infrastructure 
and development of quality national highways are part of the commitment of inclusive and sustainable growth. The initiatives 
like PM Gati Shakti and Bharatmala Pariyojana are examples of creation of strong multiplier effect of public expenditure on 
income and standard of living of people of rural India. 
Socio-economic Impacts of National Highways 
I
access to market, transport would bring about the 
specialisation and division of labour and thus foster 
process of economic growth. The importance of 
having proper road network in India was realised 
even before independence. In 1941, the Road 
Development Plan has classified roads into five 
categories namely, National Highways (NH), State 
Highways (SH), Major District Roads (MDR), Other 
District Roads (ODR) and Village Roads (VR). Out 
of them the ODR and VR are being categorised as 
Rural Roads. In the third road development plan 
(1981-2001) new accessibility criteria for village 
road were introduced and several approaches for 
rural road development were suggested (Sarkar, 
2007). The current development paradigm of 
India also emphasises on economic development 
through building physical infrastructure. Post 
pandemic, to recover the economic growth in 
India, development of physical infrastructure has 
been emphasised. The PM Gati Shakti programme 
has been launched to expedite the infrastructure 
and road development in India. 
Page 2


Kurukshetra      May  2022 24
n any country roads act as the 
arteries through which the blood of 
development runs. By linking producers 
to markets, workers to jobs, students 
to school, and the sick to hospitals, roads are 
vital to any development agenda. Improved 
road infrastructure not only increases growth 
of an economy, it as well ensures the growth 
to be inclusive and sustainable. Developing 
physical infrastructure like road network and 
transport facility play significant role in changing 
socio-economic condition and standard of 
living of people of a region or country. Physical 
infrastructures like roads have multiplier effect 
on economic development of the region and 
standard of living of people.  A wide range of social 
and economic impacts can emerge from rural 
road development, from physical connectivity 
improvements (i.e., shorter distances and travel 
times) to long-term economic impacts, such as job 
creation and welfare improvement. Adam Smith 
realised the importance of access to mobility and 
transport, as he pointed out that providing greater 
Dr. Debabrata Samanta
Roads are vital in any development agenda. National Highways play significant role in transforming rural areas though better 
access to health and education, transforming agriculture, land use and nature of employment opportunities. The current 
development paradigm in India indicates pushing forward economic growth though development of physical infrastructure 
and development of quality national highways are part of the commitment of inclusive and sustainable growth. The initiatives 
like PM Gati Shakti and Bharatmala Pariyojana are examples of creation of strong multiplier effect of public expenditure on 
income and standard of living of people of rural India. 
Socio-economic Impacts of National Highways 
I
access to market, transport would bring about the 
specialisation and division of labour and thus foster 
process of economic growth. The importance of 
having proper road network in India was realised 
even before independence. In 1941, the Road 
Development Plan has classified roads into five 
categories namely, National Highways (NH), State 
Highways (SH), Major District Roads (MDR), Other 
District Roads (ODR) and Village Roads (VR). Out 
of them the ODR and VR are being categorised as 
Rural Roads. In the third road development plan 
(1981-2001) new accessibility criteria for village 
road were introduced and several approaches for 
rural road development were suggested (Sarkar, 
2007). The current development paradigm of 
India also emphasises on economic development 
through building physical infrastructure. Post 
pandemic, to recover the economic growth in 
India, development of physical infrastructure has 
been emphasised. The PM Gati Shakti programme 
has been launched to expedite the infrastructure 
and road development in India. 
Kurukshetra      May  2022 25
Theoretical Framework
The highways are one of the most important 
parts of means of communication in India.  
Generally, the development of highways create 
impact on lives of people, especially rural people 
living in proximity in two ways; namely (i) direct 
impact in the form of enhancement of spatial 
connectivity, which increase mobility of people and 
freight, (ii) the reduction of the cost of provision 
as well as the cost of use of road infrastructure. 
All this access to highway causes higher mobility 
and lower travel cost. The other indirect effects 
of highways are generation of developmental 
externalities generated through forward and 
backward linkages (Sengupta, Coondoo, & Rout, 
2016). The development of transport system 
is augmented by development of highways. 
Development of transport system and economic 
development are not only interdependent; they 
share a very dynamic relationship. The development 
of highways tends to change the agricultural 
practice as well as pattern of settlement in the 
proximity areas. The presence of highway induce 
farmer to change cropping pattern and to move to 
more cash crops.  Better road connectivity in rural 
areas increase school attendance, particularly of 
girls. It also contributes to increasing household 
income and creating more agricultural jobs in 
certain regions (Iimi, Lancelot, Manelici, & Ogita, 
2015). One of the most important implications of 
development of highways in rural areas is change 
in the land use pattern. The new land use pattern 
induced by the development of highway creates 
more provision for non-farm sector development. 
The change also creates conducive environment 
for location and development of industries, 
trading and other services, which are of non-
farm category. The development of highways 
reduces the dependency of rural people on farm-
based livelihood practices and provides options 
of non-farm based livelihood practices as well 
initiates development of service sector. These 
developments tend to create changes in the 
pattern of economic activities, income generation, 
price evolution, employment conditions in the 
proximity rural areas. All these activities induce 
change of land use from agriculture to non-
agricultural use. These new land use pattern 
may in turn induces greater accessibility to job 
markets, health and educational facilities, attract 
investment for the development of feeder roads, 
power distribution networks, telecommunication 
facilities and other modes of connectivity among 
others, leading to a greater access of the local 
people to markets and infrastructural facilities. All 
of these cause transformation in the level of well 
being of the households of the proximity areas. 
It has been found that closer the household from 
the highway, better the availability of mobility and 
other connectivity facilities and amenities of life.  
The optimum impact of highway on local rural 
population in proximity has been estimated by the 
study by Asian Institute of Transport Development 
(2011) and it is found that the villages within 
4-5 km of highway have shown marked changes 
compared to other villages with greater distance. 
Evidence from India
The change in socio-economic situation of 
rural population in proximity of a national highway 
(NH) has been tested by various research studies. 
It has been found that in developing economies 
like India, a large public investment project on 
road infrastructure development, plays crucial 
role in reducing rural poverty and enhancing 
socio-economic well being of the people living 
in proximity of highways (Sengupta, Coondoo, & 
Rout, 2016).
The study by Basak & Siddique (2018), in 
the context of West Bengal for the Highway NH2 
found that due to development of the highway 
the transport facilities and communication system 
have been developed, which simultaneously have 
brought in a huge change in the employment 
opportunities in surrounding areas. The study 
found that, due to development of the highway a 
number of new employment opportunities have 
emerged in diverse sectors related directly or 
indirectly to the NH. New income opportunities 
have emerged that are beneficial to local people 
of surrounding villages. The study found many fold 
enhancement of price of the land on both sides 
of the highway within a very short period of time. 
However, this also has paved way for incidence 
of land grabbing and filling up water land causing 
negative impact on environment. 
Over the years the national highways has 
emerged as an integral part to transform local 
Page 3


Kurukshetra      May  2022 24
n any country roads act as the 
arteries through which the blood of 
development runs. By linking producers 
to markets, workers to jobs, students 
to school, and the sick to hospitals, roads are 
vital to any development agenda. Improved 
road infrastructure not only increases growth 
of an economy, it as well ensures the growth 
to be inclusive and sustainable. Developing 
physical infrastructure like road network and 
transport facility play significant role in changing 
socio-economic condition and standard of 
living of people of a region or country. Physical 
infrastructures like roads have multiplier effect 
on economic development of the region and 
standard of living of people.  A wide range of social 
and economic impacts can emerge from rural 
road development, from physical connectivity 
improvements (i.e., shorter distances and travel 
times) to long-term economic impacts, such as job 
creation and welfare improvement. Adam Smith 
realised the importance of access to mobility and 
transport, as he pointed out that providing greater 
Dr. Debabrata Samanta
Roads are vital in any development agenda. National Highways play significant role in transforming rural areas though better 
access to health and education, transforming agriculture, land use and nature of employment opportunities. The current 
development paradigm in India indicates pushing forward economic growth though development of physical infrastructure 
and development of quality national highways are part of the commitment of inclusive and sustainable growth. The initiatives 
like PM Gati Shakti and Bharatmala Pariyojana are examples of creation of strong multiplier effect of public expenditure on 
income and standard of living of people of rural India. 
Socio-economic Impacts of National Highways 
I
access to market, transport would bring about the 
specialisation and division of labour and thus foster 
process of economic growth. The importance of 
having proper road network in India was realised 
even before independence. In 1941, the Road 
Development Plan has classified roads into five 
categories namely, National Highways (NH), State 
Highways (SH), Major District Roads (MDR), Other 
District Roads (ODR) and Village Roads (VR). Out 
of them the ODR and VR are being categorised as 
Rural Roads. In the third road development plan 
(1981-2001) new accessibility criteria for village 
road were introduced and several approaches for 
rural road development were suggested (Sarkar, 
2007). The current development paradigm of 
India also emphasises on economic development 
through building physical infrastructure. Post 
pandemic, to recover the economic growth in 
India, development of physical infrastructure has 
been emphasised. The PM Gati Shakti programme 
has been launched to expedite the infrastructure 
and road development in India. 
Kurukshetra      May  2022 25
Theoretical Framework
The highways are one of the most important 
parts of means of communication in India.  
Generally, the development of highways create 
impact on lives of people, especially rural people 
living in proximity in two ways; namely (i) direct 
impact in the form of enhancement of spatial 
connectivity, which increase mobility of people and 
freight, (ii) the reduction of the cost of provision 
as well as the cost of use of road infrastructure. 
All this access to highway causes higher mobility 
and lower travel cost. The other indirect effects 
of highways are generation of developmental 
externalities generated through forward and 
backward linkages (Sengupta, Coondoo, & Rout, 
2016). The development of transport system 
is augmented by development of highways. 
Development of transport system and economic 
development are not only interdependent; they 
share a very dynamic relationship. The development 
of highways tends to change the agricultural 
practice as well as pattern of settlement in the 
proximity areas. The presence of highway induce 
farmer to change cropping pattern and to move to 
more cash crops.  Better road connectivity in rural 
areas increase school attendance, particularly of 
girls. It also contributes to increasing household 
income and creating more agricultural jobs in 
certain regions (Iimi, Lancelot, Manelici, & Ogita, 
2015). One of the most important implications of 
development of highways in rural areas is change 
in the land use pattern. The new land use pattern 
induced by the development of highway creates 
more provision for non-farm sector development. 
The change also creates conducive environment 
for location and development of industries, 
trading and other services, which are of non-
farm category. The development of highways 
reduces the dependency of rural people on farm-
based livelihood practices and provides options 
of non-farm based livelihood practices as well 
initiates development of service sector. These 
developments tend to create changes in the 
pattern of economic activities, income generation, 
price evolution, employment conditions in the 
proximity rural areas. All these activities induce 
change of land use from agriculture to non-
agricultural use. These new land use pattern 
may in turn induces greater accessibility to job 
markets, health and educational facilities, attract 
investment for the development of feeder roads, 
power distribution networks, telecommunication 
facilities and other modes of connectivity among 
others, leading to a greater access of the local 
people to markets and infrastructural facilities. All 
of these cause transformation in the level of well 
being of the households of the proximity areas. 
It has been found that closer the household from 
the highway, better the availability of mobility and 
other connectivity facilities and amenities of life.  
The optimum impact of highway on local rural 
population in proximity has been estimated by the 
study by Asian Institute of Transport Development 
(2011) and it is found that the villages within 
4-5 km of highway have shown marked changes 
compared to other villages with greater distance. 
Evidence from India
The change in socio-economic situation of 
rural population in proximity of a national highway 
(NH) has been tested by various research studies. 
It has been found that in developing economies 
like India, a large public investment project on 
road infrastructure development, plays crucial 
role in reducing rural poverty and enhancing 
socio-economic well being of the people living 
in proximity of highways (Sengupta, Coondoo, & 
Rout, 2016).
The study by Basak & Siddique (2018), in 
the context of West Bengal for the Highway NH2 
found that due to development of the highway 
the transport facilities and communication system 
have been developed, which simultaneously have 
brought in a huge change in the employment 
opportunities in surrounding areas. The study 
found that, due to development of the highway a 
number of new employment opportunities have 
emerged in diverse sectors related directly or 
indirectly to the NH. New income opportunities 
have emerged that are beneficial to local people 
of surrounding villages. The study found many fold 
enhancement of price of the land on both sides 
of the highway within a very short period of time. 
However, this also has paved way for incidence 
of land grabbing and filling up water land causing 
negative impact on environment. 
Over the years the national highways has 
emerged as an integral part to transform local 
Kurukshetra      May  2022 26
rural economies. It is evident that the proximity 
of highway has improved educational outcome as 
the proportion of school going children especially 
girls found to have increased. The proximity of 
households with highway also found to have 
impact on access to health. The study of Sengupta, 
Coondoo, & Rout (2016) found that highways lead 
to enhancement of accessibility to health by rural 
population living in the proximity. 
In the context of India, the study by the 
Asian Institute of Transport Development (2011) 
found that the net benefit of developed highway 
mostly relate to improvement in access to work 
and educational opportunities. The study found 
three-fold increase in the share of income from 
non-agricultural activities; 85 percent increase in 
female labour force participation and about 50 
percent increase in school enrolment. The report 
empirically tested the theory and confirms that 
proximity to highway has a positive relationship 
with: (i) demographic characteristics (density of 
population), (ii) proportion of BPL households (iii) 
share of motorised transport, 
(iv) employment in non-farm 
activities (proportion of non-
agricultural workers in total 
main workers), (v) housing 
conditions, (vi) enrolment of 
students and also that of girl 
students, and (vii) price of land. 
Current Status and Policy 
Paradigm
In an economy, spending 
on infrastructure creates 
multiplier effect on creation of additional income. 
In the context of India, the estimated value of 
the capital expenditure multiplier is 2.45 (Bose & 
Bhanumurthy, 2013). This implies every one rupee 
spent as capital expenditure creates 2.45 rupees 
income in the economy. Capital expenditure 
has a direct link with spending on creating new 
infrastructure. In last 60 years the development 
of highways has increased many folds in India. 
There has been a constant and consistent increase 
in construction of highways each year in last few 
decades. This reflects strategic orientation and 
emphasis upon physical infrastructure to push 
economic growth. The current policy paradigm 
also indicates increasing economic development 
through development of physical infrastructures 
like road and highways. The initiation of PM 
Gati Shakti to develop physical infrastructure 
is a welcome effort by current government. The 
following graph shows development of highway 
network in India over the years. 
0
50
100
150
1960
-61
1970
-71
1980
-81
1990
-91
2000
-01
2011
-12
2012
-13
2013
-14
2014
-15
2015
-16
2016
-17
2017
-18
2018
-19
Thousand KM 23.8 23.8 31.7 33.7 57.7 76.8 79.1 91.3 98 101 114.2 126.4 132.5
Length of National Highways 
Graph 1: Length of National Highways over the years
Source: Economic Survey, 2021-2022, Ministry of Finance, Government of India
Page 4


Kurukshetra      May  2022 24
n any country roads act as the 
arteries through which the blood of 
development runs. By linking producers 
to markets, workers to jobs, students 
to school, and the sick to hospitals, roads are 
vital to any development agenda. Improved 
road infrastructure not only increases growth 
of an economy, it as well ensures the growth 
to be inclusive and sustainable. Developing 
physical infrastructure like road network and 
transport facility play significant role in changing 
socio-economic condition and standard of 
living of people of a region or country. Physical 
infrastructures like roads have multiplier effect 
on economic development of the region and 
standard of living of people.  A wide range of social 
and economic impacts can emerge from rural 
road development, from physical connectivity 
improvements (i.e., shorter distances and travel 
times) to long-term economic impacts, such as job 
creation and welfare improvement. Adam Smith 
realised the importance of access to mobility and 
transport, as he pointed out that providing greater 
Dr. Debabrata Samanta
Roads are vital in any development agenda. National Highways play significant role in transforming rural areas though better 
access to health and education, transforming agriculture, land use and nature of employment opportunities. The current 
development paradigm in India indicates pushing forward economic growth though development of physical infrastructure 
and development of quality national highways are part of the commitment of inclusive and sustainable growth. The initiatives 
like PM Gati Shakti and Bharatmala Pariyojana are examples of creation of strong multiplier effect of public expenditure on 
income and standard of living of people of rural India. 
Socio-economic Impacts of National Highways 
I
access to market, transport would bring about the 
specialisation and division of labour and thus foster 
process of economic growth. The importance of 
having proper road network in India was realised 
even before independence. In 1941, the Road 
Development Plan has classified roads into five 
categories namely, National Highways (NH), State 
Highways (SH), Major District Roads (MDR), Other 
District Roads (ODR) and Village Roads (VR). Out 
of them the ODR and VR are being categorised as 
Rural Roads. In the third road development plan 
(1981-2001) new accessibility criteria for village 
road were introduced and several approaches for 
rural road development were suggested (Sarkar, 
2007). The current development paradigm of 
India also emphasises on economic development 
through building physical infrastructure. Post 
pandemic, to recover the economic growth in 
India, development of physical infrastructure has 
been emphasised. The PM Gati Shakti programme 
has been launched to expedite the infrastructure 
and road development in India. 
Kurukshetra      May  2022 25
Theoretical Framework
The highways are one of the most important 
parts of means of communication in India.  
Generally, the development of highways create 
impact on lives of people, especially rural people 
living in proximity in two ways; namely (i) direct 
impact in the form of enhancement of spatial 
connectivity, which increase mobility of people and 
freight, (ii) the reduction of the cost of provision 
as well as the cost of use of road infrastructure. 
All this access to highway causes higher mobility 
and lower travel cost. The other indirect effects 
of highways are generation of developmental 
externalities generated through forward and 
backward linkages (Sengupta, Coondoo, & Rout, 
2016). The development of transport system 
is augmented by development of highways. 
Development of transport system and economic 
development are not only interdependent; they 
share a very dynamic relationship. The development 
of highways tends to change the agricultural 
practice as well as pattern of settlement in the 
proximity areas. The presence of highway induce 
farmer to change cropping pattern and to move to 
more cash crops.  Better road connectivity in rural 
areas increase school attendance, particularly of 
girls. It also contributes to increasing household 
income and creating more agricultural jobs in 
certain regions (Iimi, Lancelot, Manelici, & Ogita, 
2015). One of the most important implications of 
development of highways in rural areas is change 
in the land use pattern. The new land use pattern 
induced by the development of highway creates 
more provision for non-farm sector development. 
The change also creates conducive environment 
for location and development of industries, 
trading and other services, which are of non-
farm category. The development of highways 
reduces the dependency of rural people on farm-
based livelihood practices and provides options 
of non-farm based livelihood practices as well 
initiates development of service sector. These 
developments tend to create changes in the 
pattern of economic activities, income generation, 
price evolution, employment conditions in the 
proximity rural areas. All these activities induce 
change of land use from agriculture to non-
agricultural use. These new land use pattern 
may in turn induces greater accessibility to job 
markets, health and educational facilities, attract 
investment for the development of feeder roads, 
power distribution networks, telecommunication 
facilities and other modes of connectivity among 
others, leading to a greater access of the local 
people to markets and infrastructural facilities. All 
of these cause transformation in the level of well 
being of the households of the proximity areas. 
It has been found that closer the household from 
the highway, better the availability of mobility and 
other connectivity facilities and amenities of life.  
The optimum impact of highway on local rural 
population in proximity has been estimated by the 
study by Asian Institute of Transport Development 
(2011) and it is found that the villages within 
4-5 km of highway have shown marked changes 
compared to other villages with greater distance. 
Evidence from India
The change in socio-economic situation of 
rural population in proximity of a national highway 
(NH) has been tested by various research studies. 
It has been found that in developing economies 
like India, a large public investment project on 
road infrastructure development, plays crucial 
role in reducing rural poverty and enhancing 
socio-economic well being of the people living 
in proximity of highways (Sengupta, Coondoo, & 
Rout, 2016).
The study by Basak & Siddique (2018), in 
the context of West Bengal for the Highway NH2 
found that due to development of the highway 
the transport facilities and communication system 
have been developed, which simultaneously have 
brought in a huge change in the employment 
opportunities in surrounding areas. The study 
found that, due to development of the highway a 
number of new employment opportunities have 
emerged in diverse sectors related directly or 
indirectly to the NH. New income opportunities 
have emerged that are beneficial to local people 
of surrounding villages. The study found many fold 
enhancement of price of the land on both sides 
of the highway within a very short period of time. 
However, this also has paved way for incidence 
of land grabbing and filling up water land causing 
negative impact on environment. 
Over the years the national highways has 
emerged as an integral part to transform local 
Kurukshetra      May  2022 26
rural economies. It is evident that the proximity 
of highway has improved educational outcome as 
the proportion of school going children especially 
girls found to have increased. The proximity of 
households with highway also found to have 
impact on access to health. The study of Sengupta, 
Coondoo, & Rout (2016) found that highways lead 
to enhancement of accessibility to health by rural 
population living in the proximity. 
In the context of India, the study by the 
Asian Institute of Transport Development (2011) 
found that the net benefit of developed highway 
mostly relate to improvement in access to work 
and educational opportunities. The study found 
three-fold increase in the share of income from 
non-agricultural activities; 85 percent increase in 
female labour force participation and about 50 
percent increase in school enrolment. The report 
empirically tested the theory and confirms that 
proximity to highway has a positive relationship 
with: (i) demographic characteristics (density of 
population), (ii) proportion of BPL households (iii) 
share of motorised transport, 
(iv) employment in non-farm 
activities (proportion of non-
agricultural workers in total 
main workers), (v) housing 
conditions, (vi) enrolment of 
students and also that of girl 
students, and (vii) price of land. 
Current Status and Policy 
Paradigm
In an economy, spending 
on infrastructure creates 
multiplier effect on creation of additional income. 
In the context of India, the estimated value of 
the capital expenditure multiplier is 2.45 (Bose & 
Bhanumurthy, 2013). This implies every one rupee 
spent as capital expenditure creates 2.45 rupees 
income in the economy. Capital expenditure 
has a direct link with spending on creating new 
infrastructure. In last 60 years the development 
of highways has increased many folds in India. 
There has been a constant and consistent increase 
in construction of highways each year in last few 
decades. This reflects strategic orientation and 
emphasis upon physical infrastructure to push 
economic growth. The current policy paradigm 
also indicates increasing economic development 
through development of physical infrastructures 
like road and highways. The initiation of PM 
Gati Shakti to develop physical infrastructure 
is a welcome effort by current government. The 
following graph shows development of highway 
network in India over the years. 
0
50
100
150
1960
-61
1970
-71
1980
-81
1990
-91
2000
-01
2011
-12
2012
-13
2013
-14
2014
-15
2015
-16
2016
-17
2017
-18
2018
-19
Thousand KM 23.8 23.8 31.7 33.7 57.7 76.8 79.1 91.3 98 101 114.2 126.4 132.5
Length of National Highways 
Graph 1: Length of National Highways over the years
Source: Economic Survey, 2021-2022, Ministry of Finance, Government of India
Kurukshetra      May  2022 27
The 63.71 lakh km (till 
2019) of the road network in 
India is the second-highest in 
the world, and there has been 
a constant increase in road 
network in India. The extent 
of road construction per day, 
as reported, has increased in 
2020-21 to 36.5 kms per day 
from 28 kms per day in 2019-
20, a rise by 30.4 percent.  
The total expenditure of the 
Ministry of Road Transport 
and Highways for 2021-22 
is estimated at Rs. 1,18,101 
crore.  This is an annual 
increase of 23 percent over the 
actual expenditure for 2019-
20.  The Union Budget 2022-2023 aims for the 
formulation of Master Plan for expressways and 
completing 25,000 km national highways in 2022-
23. An amount of  Rs. 1,99,107.71 crores has been 
allocated for the year 2022-23 for the Ministry 
of Road Transport and Highways (Government of 
India, 2022). The analysis of expenditure reveals 
that the government has increased proportion of 
capital expenditure significantly with an objective 
of sustainable growth via development of physical 
infrastructure. It is evident that in 2021-22, more 
than 91 percent expenditure on total expenditure is 
of capital expenditure. The following table depicts 
that. This trend in expenditure and movement 
towards more capital expenditure indicates 
leveraging the possibilities of multiplier impact of 
public expenditure on physical infrastructure.  
Table 1:  Budget allocations for the Ministry of 
Road Transport and Highways (in Rs. crore)
 2019-
20
2020-21 2021-22 Change 
(Annualised) 
(Actuals 
2019-20 to 
BE 2021-22)
Actual RE BE
Revenue 9,875 9,770 9,871 0%
Capital 68,374 92,053 1,08,230 26%
Total 78,249 1,01,823 1,18,101 23%
Sources: Demands for Grants 2021-22, Ministry of Road 
Transport and Highways; PRS.
Bharatmala Programme: The grand 
initiative of connecting large part of India 
through road connectivity has 
been initiated in 2017 under the 
Bharatmala Pariyojana scheme. 
The Bhartamala Pariyojana is a 
paradigm shift in the infrastructural 
development programme in 
India. The programme has been 
conceptualised as India’s largest 
infrastructural programme. The 
programme aims to develop 34,800 
km of National Highway corridors, 
connecting 600+ districts in the 
nation. Bharatmala Pariyojana is 
also expected to usher in a new 
age of technology driven highway 
development in the country 
through deployment of automatic 
traffic surveys and satellite 
mapping and imagery to identify upgradation 
requirements of corridors. Bharatmala Pariyojana 
focuses on development of 24,800 km of dedicated 
expressways, access-controlled economic 
corridors, associated feeder routes, coastal and 
port connectivity, and border and international 
connectivity corridors. In addition, 10,000 km of 
ongoing National Highways Development Project 
(NHDP) balance road work is envisioned as part 
of the overall program which will cover a total 
length of 34,800 km of highway. A total of Rs. 
5,35,000 has been allocated for this programme. 
Once implemented, the programme will have 
multiplier effect on socio-economic situation of 
the proximity area as well as the country. 
Conclusion
The strategy of pushing forward economic 
growth through development of physical 
infrastructure ensures inclusive as well sustainable 
growth of a country. Development of highways 
network is one of the strategies to push physical 
infrastructure endowment of a country. The 
highways create positive impact on socio-economic 
status of villages they pass through.  A wide range 
of social and economic impacts, from physical 
connectivity to long-term economic impacts, such 
as job creation and welfare improvement emerge 
in rural areas from road connectivity. The highway 
connectivity in rural areas has impacts upon 
change in agriculture and crop pattern, enhance 
accessibility of education and health as well 
The highway connectivity in 
rural areas has impacts upon 
change in agriculture and 
crop pattern and enhance 
accessibility of education 
and health as well enhance 
value of land in proximity 
areas. Along with this, the 
improved connectivity through 
highway also provides an 
impetus to shift of livelihood 
practices and paves more 
opportunities in non-farm 
sector employment. India has 
emphasised economic growth 
via development of physical 
infrastructure long back. 
Page 5


Kurukshetra      May  2022 24
n any country roads act as the 
arteries through which the blood of 
development runs. By linking producers 
to markets, workers to jobs, students 
to school, and the sick to hospitals, roads are 
vital to any development agenda. Improved 
road infrastructure not only increases growth 
of an economy, it as well ensures the growth 
to be inclusive and sustainable. Developing 
physical infrastructure like road network and 
transport facility play significant role in changing 
socio-economic condition and standard of 
living of people of a region or country. Physical 
infrastructures like roads have multiplier effect 
on economic development of the region and 
standard of living of people.  A wide range of social 
and economic impacts can emerge from rural 
road development, from physical connectivity 
improvements (i.e., shorter distances and travel 
times) to long-term economic impacts, such as job 
creation and welfare improvement. Adam Smith 
realised the importance of access to mobility and 
transport, as he pointed out that providing greater 
Dr. Debabrata Samanta
Roads are vital in any development agenda. National Highways play significant role in transforming rural areas though better 
access to health and education, transforming agriculture, land use and nature of employment opportunities. The current 
development paradigm in India indicates pushing forward economic growth though development of physical infrastructure 
and development of quality national highways are part of the commitment of inclusive and sustainable growth. The initiatives 
like PM Gati Shakti and Bharatmala Pariyojana are examples of creation of strong multiplier effect of public expenditure on 
income and standard of living of people of rural India. 
Socio-economic Impacts of National Highways 
I
access to market, transport would bring about the 
specialisation and division of labour and thus foster 
process of economic growth. The importance of 
having proper road network in India was realised 
even before independence. In 1941, the Road 
Development Plan has classified roads into five 
categories namely, National Highways (NH), State 
Highways (SH), Major District Roads (MDR), Other 
District Roads (ODR) and Village Roads (VR). Out 
of them the ODR and VR are being categorised as 
Rural Roads. In the third road development plan 
(1981-2001) new accessibility criteria for village 
road were introduced and several approaches for 
rural road development were suggested (Sarkar, 
2007). The current development paradigm of 
India also emphasises on economic development 
through building physical infrastructure. Post 
pandemic, to recover the economic growth in 
India, development of physical infrastructure has 
been emphasised. The PM Gati Shakti programme 
has been launched to expedite the infrastructure 
and road development in India. 
Kurukshetra      May  2022 25
Theoretical Framework
The highways are one of the most important 
parts of means of communication in India.  
Generally, the development of highways create 
impact on lives of people, especially rural people 
living in proximity in two ways; namely (i) direct 
impact in the form of enhancement of spatial 
connectivity, which increase mobility of people and 
freight, (ii) the reduction of the cost of provision 
as well as the cost of use of road infrastructure. 
All this access to highway causes higher mobility 
and lower travel cost. The other indirect effects 
of highways are generation of developmental 
externalities generated through forward and 
backward linkages (Sengupta, Coondoo, & Rout, 
2016). The development of transport system 
is augmented by development of highways. 
Development of transport system and economic 
development are not only interdependent; they 
share a very dynamic relationship. The development 
of highways tends to change the agricultural 
practice as well as pattern of settlement in the 
proximity areas. The presence of highway induce 
farmer to change cropping pattern and to move to 
more cash crops.  Better road connectivity in rural 
areas increase school attendance, particularly of 
girls. It also contributes to increasing household 
income and creating more agricultural jobs in 
certain regions (Iimi, Lancelot, Manelici, & Ogita, 
2015). One of the most important implications of 
development of highways in rural areas is change 
in the land use pattern. The new land use pattern 
induced by the development of highway creates 
more provision for non-farm sector development. 
The change also creates conducive environment 
for location and development of industries, 
trading and other services, which are of non-
farm category. The development of highways 
reduces the dependency of rural people on farm-
based livelihood practices and provides options 
of non-farm based livelihood practices as well 
initiates development of service sector. These 
developments tend to create changes in the 
pattern of economic activities, income generation, 
price evolution, employment conditions in the 
proximity rural areas. All these activities induce 
change of land use from agriculture to non-
agricultural use. These new land use pattern 
may in turn induces greater accessibility to job 
markets, health and educational facilities, attract 
investment for the development of feeder roads, 
power distribution networks, telecommunication 
facilities and other modes of connectivity among 
others, leading to a greater access of the local 
people to markets and infrastructural facilities. All 
of these cause transformation in the level of well 
being of the households of the proximity areas. 
It has been found that closer the household from 
the highway, better the availability of mobility and 
other connectivity facilities and amenities of life.  
The optimum impact of highway on local rural 
population in proximity has been estimated by the 
study by Asian Institute of Transport Development 
(2011) and it is found that the villages within 
4-5 km of highway have shown marked changes 
compared to other villages with greater distance. 
Evidence from India
The change in socio-economic situation of 
rural population in proximity of a national highway 
(NH) has been tested by various research studies. 
It has been found that in developing economies 
like India, a large public investment project on 
road infrastructure development, plays crucial 
role in reducing rural poverty and enhancing 
socio-economic well being of the people living 
in proximity of highways (Sengupta, Coondoo, & 
Rout, 2016).
The study by Basak & Siddique (2018), in 
the context of West Bengal for the Highway NH2 
found that due to development of the highway 
the transport facilities and communication system 
have been developed, which simultaneously have 
brought in a huge change in the employment 
opportunities in surrounding areas. The study 
found that, due to development of the highway a 
number of new employment opportunities have 
emerged in diverse sectors related directly or 
indirectly to the NH. New income opportunities 
have emerged that are beneficial to local people 
of surrounding villages. The study found many fold 
enhancement of price of the land on both sides 
of the highway within a very short period of time. 
However, this also has paved way for incidence 
of land grabbing and filling up water land causing 
negative impact on environment. 
Over the years the national highways has 
emerged as an integral part to transform local 
Kurukshetra      May  2022 26
rural economies. It is evident that the proximity 
of highway has improved educational outcome as 
the proportion of school going children especially 
girls found to have increased. The proximity of 
households with highway also found to have 
impact on access to health. The study of Sengupta, 
Coondoo, & Rout (2016) found that highways lead 
to enhancement of accessibility to health by rural 
population living in the proximity. 
In the context of India, the study by the 
Asian Institute of Transport Development (2011) 
found that the net benefit of developed highway 
mostly relate to improvement in access to work 
and educational opportunities. The study found 
three-fold increase in the share of income from 
non-agricultural activities; 85 percent increase in 
female labour force participation and about 50 
percent increase in school enrolment. The report 
empirically tested the theory and confirms that 
proximity to highway has a positive relationship 
with: (i) demographic characteristics (density of 
population), (ii) proportion of BPL households (iii) 
share of motorised transport, 
(iv) employment in non-farm 
activities (proportion of non-
agricultural workers in total 
main workers), (v) housing 
conditions, (vi) enrolment of 
students and also that of girl 
students, and (vii) price of land. 
Current Status and Policy 
Paradigm
In an economy, spending 
on infrastructure creates 
multiplier effect on creation of additional income. 
In the context of India, the estimated value of 
the capital expenditure multiplier is 2.45 (Bose & 
Bhanumurthy, 2013). This implies every one rupee 
spent as capital expenditure creates 2.45 rupees 
income in the economy. Capital expenditure 
has a direct link with spending on creating new 
infrastructure. In last 60 years the development 
of highways has increased many folds in India. 
There has been a constant and consistent increase 
in construction of highways each year in last few 
decades. This reflects strategic orientation and 
emphasis upon physical infrastructure to push 
economic growth. The current policy paradigm 
also indicates increasing economic development 
through development of physical infrastructures 
like road and highways. The initiation of PM 
Gati Shakti to develop physical infrastructure 
is a welcome effort by current government. The 
following graph shows development of highway 
network in India over the years. 
0
50
100
150
1960
-61
1970
-71
1980
-81
1990
-91
2000
-01
2011
-12
2012
-13
2013
-14
2014
-15
2015
-16
2016
-17
2017
-18
2018
-19
Thousand KM 23.8 23.8 31.7 33.7 57.7 76.8 79.1 91.3 98 101 114.2 126.4 132.5
Length of National Highways 
Graph 1: Length of National Highways over the years
Source: Economic Survey, 2021-2022, Ministry of Finance, Government of India
Kurukshetra      May  2022 27
The 63.71 lakh km (till 
2019) of the road network in 
India is the second-highest in 
the world, and there has been 
a constant increase in road 
network in India. The extent 
of road construction per day, 
as reported, has increased in 
2020-21 to 36.5 kms per day 
from 28 kms per day in 2019-
20, a rise by 30.4 percent.  
The total expenditure of the 
Ministry of Road Transport 
and Highways for 2021-22 
is estimated at Rs. 1,18,101 
crore.  This is an annual 
increase of 23 percent over the 
actual expenditure for 2019-
20.  The Union Budget 2022-2023 aims for the 
formulation of Master Plan for expressways and 
completing 25,000 km national highways in 2022-
23. An amount of  Rs. 1,99,107.71 crores has been 
allocated for the year 2022-23 for the Ministry 
of Road Transport and Highways (Government of 
India, 2022). The analysis of expenditure reveals 
that the government has increased proportion of 
capital expenditure significantly with an objective 
of sustainable growth via development of physical 
infrastructure. It is evident that in 2021-22, more 
than 91 percent expenditure on total expenditure is 
of capital expenditure. The following table depicts 
that. This trend in expenditure and movement 
towards more capital expenditure indicates 
leveraging the possibilities of multiplier impact of 
public expenditure on physical infrastructure.  
Table 1:  Budget allocations for the Ministry of 
Road Transport and Highways (in Rs. crore)
 2019-
20
2020-21 2021-22 Change 
(Annualised) 
(Actuals 
2019-20 to 
BE 2021-22)
Actual RE BE
Revenue 9,875 9,770 9,871 0%
Capital 68,374 92,053 1,08,230 26%
Total 78,249 1,01,823 1,18,101 23%
Sources: Demands for Grants 2021-22, Ministry of Road 
Transport and Highways; PRS.
Bharatmala Programme: The grand 
initiative of connecting large part of India 
through road connectivity has 
been initiated in 2017 under the 
Bharatmala Pariyojana scheme. 
The Bhartamala Pariyojana is a 
paradigm shift in the infrastructural 
development programme in 
India. The programme has been 
conceptualised as India’s largest 
infrastructural programme. The 
programme aims to develop 34,800 
km of National Highway corridors, 
connecting 600+ districts in the 
nation. Bharatmala Pariyojana is 
also expected to usher in a new 
age of technology driven highway 
development in the country 
through deployment of automatic 
traffic surveys and satellite 
mapping and imagery to identify upgradation 
requirements of corridors. Bharatmala Pariyojana 
focuses on development of 24,800 km of dedicated 
expressways, access-controlled economic 
corridors, associated feeder routes, coastal and 
port connectivity, and border and international 
connectivity corridors. In addition, 10,000 km of 
ongoing National Highways Development Project 
(NHDP) balance road work is envisioned as part 
of the overall program which will cover a total 
length of 34,800 km of highway. A total of Rs. 
5,35,000 has been allocated for this programme. 
Once implemented, the programme will have 
multiplier effect on socio-economic situation of 
the proximity area as well as the country. 
Conclusion
The strategy of pushing forward economic 
growth through development of physical 
infrastructure ensures inclusive as well sustainable 
growth of a country. Development of highways 
network is one of the strategies to push physical 
infrastructure endowment of a country. The 
highways create positive impact on socio-economic 
status of villages they pass through.  A wide range 
of social and economic impacts, from physical 
connectivity to long-term economic impacts, such 
as job creation and welfare improvement emerge 
in rural areas from road connectivity. The highway 
connectivity in rural areas has impacts upon 
change in agriculture and crop pattern, enhance 
accessibility of education and health as well 
The highway connectivity in 
rural areas has impacts upon 
change in agriculture and 
crop pattern and enhance 
accessibility of education 
and health as well enhance 
value of land in proximity 
areas. Along with this, the 
improved connectivity through 
highway also provides an 
impetus to shift of livelihood 
practices and paves more 
opportunities in non-farm 
sector employment. India has 
emphasised economic growth 
via development of physical 
infrastructure long back. 
Kurukshetra      May  2022 28
enhance value of land in proximity areas. Along 
with this, the improved connectivity through 
highway also provides an impetus to shift of 
livelihood practices and paves more opportunities 
in non-farm sector employment. India has 
emphasised economic growth via development 
of physical infrastructure long back. There has 
been a consistent improvement in development 
of highway connectivity. However, the current 
paradigm in India indicates adoption of growth 
through development of physical infrastructure 
and a huge emphasis on development of highways. 
The initiative like PM Gati Shakti and programme 
like Bharatmala Pariyojana are examples of 
creation of strong multiplier effect of public 
expenditure on income and standard of living of 
people of rural India.  
References
1. Asher, S., & Novosad, P. (2020). Rural Roads 
and Local Economic Development. American 
Economic Review , 110 (3), 797-823.
2. Asian Institute of Transport Development. 
(2011). Socio-economic Impact of National 
Highway on Rural Populaton. New 
Delhi: Asian Institute of Transport 
Development, New Delhi.
3. Basak, A., & Siddique, G. (2018). 
Economic Impact of National Highway 
2: A Study of Its Section from Nababhat 
to Dankuni. International Journal of 
Scientific Research and Review , 7 (8), 
329-344.
4. Bose, S., & Bhanumurthy, N. R. (2013). 
Fiscal Multipliers for India. National 
Institute of Public Finance and Policy 
Working Paper.
5. Fan, S., Hazzel, P., & Thorat, S. (1999). 
Linkages Between Government 
Spending, Growth and Poverty in Rural 
India. Washington Dc: International 
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Ogita, S. (2015). Social and Economic 
Impacts of Rural Road Improvements in 
the State of Tocantins, Brazil. Policy Research 
Working Paper 7249. The World Bank.
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9. Sarkar, A. K. (2007). Impact of PMGSY Roads 
on the Traffic Safety of School-Going Children 
in Rural Areas. International Forum for Rural 
Transport and Development.
10. Sengupta, R., Coondoo, D., & Rout, B. (2016). 
Socio-economic Well-being—Impact of Wider 
Highways on the Rural Poor Living in Proximity. 
Journal of Development Policy and Practice , 1 
(2), 222-264.
11. Van de Walle, D., & Cratty, D. (2002). Impact 
evaluation of a rural road rehabilitation 
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(The author is Assistant Professor, 
Chandragupt Institute of Management, Patna. 
Views expressed are personal. Email: debabrata@
cimp.ac.in)