How Roads help the Economic Development

Roads are everyday things nowadays but how such a common thing can actually affect the Economic Development? And how it affects our Financial Economics? These questions we are going to discuss in this blog.

“US doesn’t have good roads because it’s rich but rich because it has good roads.”

-          Henry Ford 

As Henry Ford says, the road is used as a median for economic development. Good drives can lead towards Economic Growth. That’s why while studying economics many books focus on public expenditure and deficit budget. Government deficit budget has importance in developing country.

So how can we achieve economic development by just developing roads?

We will divide it into two parts

i.                    Business use

ii.                  Normal use

i.                    Business use

For understanding it, we will look about commercial use of the road. Road quality can reduce time spending on travel and minimize loss of good during transportation. To understand it lets take an example. Let’s imagine you produce raw products in Bangalore, and this raw material is used to create a final well in Mumbai. So I have to transport my goods from Bangalore to Mumbai and in the minimum time possible so that price can be minimized and it will affect the number of last goods and vice versa. It's not only happening while producing but also while selling of products from one state to another for. e.g., Assam is stated which produce more Tea and if I have to sell than in any other part of the country. I have to use roads as it uses minimum price per km I travel but if goods take 1 day to go from Assam to Mumbai all the price of petrol and transportation vehicle will be added to products and it will keep on rising as time raise and vice versa.

How time affects the production to show it following the numerical example:-

Our close economic competitor and neighbor China

To travel from Beijing to Shanghai, it takes 12.5 hours, and distance is 1213 KM

To move from Delhi to Mumbai, it takes 22.5 hours, and the range is 1414 KM

Average speed is also 100 km/hr and 60km/hr respectively

10 hours delay is not a small time period let take an example if china’s cost for that travel is X then India’s will be X+10 and that 10 will contain the figures of per hour cost, i.e., petrol, toll and vehicle expanse

So in this example, we can say that China is producing goods 10 hours before India and that too because of the conditions of roads, a straightforward thing is helping China.

ii.                  Normal use

In this type ordinary people use roads for their day to day uses, they use it for up down from office to home, etc.

By development of road we can reduce pressure on our existing cities like Mumbai, Delhi, etc. as more people work in this cities and try to live inside it so that they can reach their destination on time and that makes a massive pressure on towns as due to our population more and more people attract towards cities. So to tackle this, we can build the roads in and outside cities so that they can live outside the city and can travel when you want without delay.

For, e.g., Mumbai is now overpopulated and people are ready to live in small houses and travel in overpopulated trains which can be changed if we make roads and shift these peoples from Mumbai to New Mumbai ( New city to reduce pressure on the central town) which is 25-30 km away.

In common words, we can say that if we have roads we can use land which was not in use earlier, we have a significant amount of unused land in our country that can utilize. As we make a road in the undeveloped sector then companies can use it, and that sector also be developed for, e.g., New Mumbai was an area which helps to reduce pressure on Mumbai and nowadays this area is used by many companies, BKC in Mumbai is also an area which is developed by developing roads.

What is an actual problem of Indian roads?  

So why not we take the initiative and do something to reduce this time we have NH ( National Highway ) in our country but they are not up to the mark there are various problems with the Indian roads 

             Quality of roads is poor:-

                                          We have the roads but may be material which we are using is poor that’s why we can often see potholes on the road, If we can see it in big cities then just imagine conditions of the rural road

  

        Insufficient Expressway:-

                                             Expressway can be used to reduce timing as there are many restrictions on a motorcycle and average speed of vehicle also rises for, e.g., Mumbai – Pune expressway minimizes the time from 7-8 hours to 2-3 hours.
  

         Expansion of roads:-

                                    In India we often can see two-lane roads where it needs four lanes or more, due to this we can see traffic conductions on most roads

         Slow road making process:-

                                             It is very shocking that there is a named NHDP which started in 1998 it was not completed yet.

Bharatmala Project:-

To make new roads Government of India has make a new project called Bharatmala Project which can help to make new roads

Few highlights of the project

SL No.	Components	Length - Km	Outlay – Rs crore
a.	Expressways	800	40,000
b.	Inter-Corridor & feeder roads	6,000	80,000
c.	Economic corridors development	9,000	1,20,000
d.	Coastal & port connectivity roads	2,000	20,000
e.	National corridors Efficiency improvement	5,000	1,00,000
f.	Border & International connectivity roads	2,000	25,000
	Total	24,800	3,85,000
	Balance road works under NHDP	10,000	1,50,000

In this projects, 34,800 km of roads will be constructed.

Bharatmala project will lower logistic costs to 6% from 18%

-          Nitin Gadkari

Minister of Road Transport and Highways of India

India now has logistic expenses costs at 16-18% compared to China which is 8-10%

Bharatmala project will increase vehicle traveling speed by around 20-25%

It is estimated that this project will make 22 million jobs. 

This is one huge step taken by the govt. Of India, we just have seen whether it get complete in time or not, because India has horrible track records on completing projects on time.

Conclusion:-

Roads are not everyday things nowadays it can make a significant impact on the economic development and Government of India. Is seems to it seriously and making the effort of it like Bharatmala projects etc. and it will make a difference in upcoming years as India head towards development. It takes some time for us to see the outcome but it will surely help India to be on the path of economic growth.