Mega Infra Projects To Improve Connectivity, Boost Real Estate

In a major boost to the railway network in the country, the Cabinet Committee on Economic Affairs (CCEA) recently approved projects worth over Rs 24,000 crore to improve connectivity across nine states. These states include Andhra Pradesh, Assam, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Telangana and Uttar Pradesh. The CCEA has given an approval for the development of 1,120 kilometres of national highways in across Bihar, Karnataka, Odisha, Rajasthan and West Bengal at the estimated cost of Rs 6,461 crore.

While the first project is expected to "help the upcoming industries in the region and provide additional transport capacity to meet their requirements", the latter is expected to "ensure safe, fast and all-weather movement of traffic on the proposed national highways, mostly located in the backward region". The former is also expected to help the Indian railways earn better revenues.

Now, while the prime target of the government is to improve connectivity across regions and remove traffic bottlenecks through these projects, it will also be giving a major impetus to the real estate sector through this. After all, connectivity is the key parameter based on which real estate is evaluated. For instance, several locations in major Indian cities have huge inventory pile-up due to poor transport facilities. Many of the states where these projects are planned are lagging in terms of connectivity and that is the reason why property markets have also not been able to realise their true potential there. This is a major issue for remote areas in states such as Assam, Chhattisgarh and Jharkhand.  

It is to be noted that as major cities are brimming with a rising population, the government will have to create new urban centres to accommodate the rising headcounts. The same is true of industries, too. Past examples show brilliant business models have failed if the locations where they are set up are caught in connectivity hurdles. However, a lot would depend on how effectively these plans are implemented.