Due to the Corona crisis, the construction of highways in India may decline compared to last year. Rating agency Crisil said this in one of its reports. Crisil has said that the construction of highways could decline by 10-13% over the previous year due to the lockdown. In such a situation it can have a direct impact on business activities.
Rating agency Crisil said in a report on the road sector on Wednesday that traffic on national highways is reaching about 75 percent of the level before the lockdown implemented during Kovid 19. With this, electronic toll collection is on the rise, while the construction of highways may fall by 10-13% compared to last year.
The report said that there are mixed indications about recovery in this sector. The report said that toll collection on national highways in June has returned to the level of March and touched 75% in February. It has also said that regular traffic on the highways declined by about 88 per cent during April.
The movement of people and goods was halted in April and May due to the lockdown enforced due to the Covid-19 epidemic. But now gradually the restrictions are being lifted and the economy is back on track. Talking about toll collection, 11 crore vehicles were charged in February 2020, while in April, only one crore vehicles were paid.
During this time, the Center had also issued several guidelines to the states regarding freight. Rajeshwar Burla, vice-president of corporate ratings institute ICRA Ltd, says that toll collection overall has picked up faster than before. This has been a trend for more than two months, which shows that this is not just due to the demand of the present time.
The report also mentions the construction of national highway after April. It said that the construction of national highways is also accelerating. This construction work has reached 637 km in May, while in April only 210 km highway has been constructed.
But due to the lockdown, the months in which major construction was to be done could not be done. Along with this, the migration of laborers is also going on. In such a situation, normalcy is expected to be restored only after the monsoon. Overall, highway construction is projected to decline by 10–13 per cent this fiscal year.
However, during this period, the central government has increased spending on highway projects and spent Rs 18,700 crore in April-May, which is 46 times more than Rs 400 crore in the same period of last fiscal. The main reason behind this was the payment and cash flow made to the developers associated with the construction work. In such a situation, it is possible that in the future, the Ministry of Transport will tighten its expenditure.
According to the report, about 9,000-9,500 km of highway construction has been completed so far, while 7,000-7,500 km of work has been awarded. The construction of the National Highway in the current financial year is 10,237 km as compared to 10,855 km in the last financial year, while 8,911 km was approved in FY 2020 as compared to 5,470 km in the last financial year.