Every Re Invested In Highways Added 3x to GDP

New Delhi: Investments made in India’s highways sector have translated to a more than three-fold increase in the country’s GDP due to the multiplier effect resulting from the creation of more jobs and incomes in the economy, according to an IIM-Bangalore study.

The research study said that every unit of expenditure on highway construction has contributed to a 3.21-unit increase in the country’s Gross Domestic Product (GDP). According to the study, conducted from 2013 to 2022, national highway development has led to a 9 per cent increase in household incomes, a 6 per cent rise in household expenditure, and a double-digit surge of 10.4 per cent in car sales.

It also highlighted that the development of highways in the country has led to a close to 3 per cent reduction in transportation costs between factories and sources supplying raw materials and by 1.33 per cent between factories and customers that buy the finished products, reflecting an improved efficiency in the supply chain.

The study pointed out that the new highways have given a fillip to the agricultural sector and MSMEs which account for a major share of employment in the country.