A couple of weeks after taking over as Prime Minister in October 1999, Atal Bihari Vajpayee was scheduled to address the FICCI annual general meeting. He asked his Finance Minister, Yashwant Sinha, what he could tell the gathering of business leaders — some of the big ideas that his government, which had famously lost by just one vote only a few months earlier, was contemplating.
Sinha suggested that the PM speak about National Highways, and the impact they could have in transforming India. The Minister had been impressed by the autobahns — the federally controlled highway system in Germany — where he had served as a civil servant in the early 1970s.
That same interest may have influenced Sinha to announce in his 1988-99 Budget that India should build more roads, their quality should improve, and that National Highways be brought up to international standards. However, the allocation for NHAI that year was a modest Rs 500 crore — for new projects and four-laning of National Highways.
At FICCI, Vajpayee employed his celebrated oratory to sketch his government’s vision of connecting the country through a network of world-class highways: the Golden Quadrilateral linking the metros of Delhi, Mumbai, Chennai and Kolkata, the Srinagar-Kanyakumari North-South corridor, and the Silchar-Porbandar East-West corridor.
Soon afterward, Nitin Gadkari, the union Transport Minister who was at that time PWD Minister in the Shiv Sena-BJP government in Maharashtra, steered India’s first major expressway project — the Mumbai-Pune Expressway — through the recently set up Maharashtra State Road Development Corporation Ltd. The company’s chief — a civil servant — was told to make a presentation to the Prime Minister’s Office. By the end of that year, a plan had been firmed up — and soon after returning from a trip to the Andamans in early January 2000, the Prime Minister headed to a location near Bengaluru to launch the project, which was flagged off simultaneously at 20 other places.
It was an ambitious project, the tab was Rs 54,000 crore, and funding was a challenge. Therefore, a Re 1 cess was imposed on petrol — and later, diesel — with the bulk of the proceeds going to the National Highways project. Rural roads were subsequently added on — the Cabinet approving in December 2000 Phase 1 of the project at a cost of Rs 30,000 crore. The fuel cess, meanwhile, became controversial, and an uproar in Parliament forced the government to roll it back.
However, institutional arrangements were put in place alongside. The National Highways Authority of India (NHAI), formed in 1988, was revamped and empowered. Hardly any Indian firms had experience of such projects, so some Malaysian companies came forward initially. Fiscal incentives helped — the government slashed duty on the import of capital equipment for road construction projects to zero. Other issues too were gradually sorted out — and as the projects gathered pace, the impact was demonstrated in shortened travel times, improved ride quality and heavier traffic movements. The knock-on impact on the economy was to be felt over the next few years.
Three years later, Vajpayee addressed FICCI again. He reminded members of the time he had announced the National Highways project, and informed them that in 2002, it was generating employment for 2.5 lakh construction workers and 10,000 supervisors — apart from indirect employment for many others.
To Vajpayee, NHDP spelt public-private partnership — the much maligned PPP model of today — and showed that India could “think big and implement big”. International crude prices were very low at $ 30 a barrel then, and the government mobilised extra resources through a cess earmarked for the roads sector. This was something the present government too could have done.
A decade and a half on, the numbers tell the story of perhaps one of India’s greatest infrastructure projects, and its execution. By the end of May 2015, NHAI had completed 49,036 km, nearly half of which — 24,188 km — were 4- or 6-lane stretches. Speaking in Vadodara some time after NHDP was launched, Vajpayee had said: “The highways we are building under the National Highways Development Project are not mere highways. They are the bhagyarekha (lines of destiny) on the hands of our nation. With these highways, we are writing a new destiny of India.”
This was vintage Vajpayee. The National Highway projects have indeed been a gamechanger. Looking back, what he said then should resonate now for NDA-II. Vajpayee had said that his government, while attempting to carry out second generation reforms, would also try and narrow the gap between expectations and execution. For this government, that should be something worth looking at.
* A B Vajpayee’s address to the FICCI AGM, 1999
* Confessions of a Swadeshi Reformer: My Years as a Finance Minister, by Yashwant Sinha