SC Delinks Environment and Forest Clearance From Road-Widening Projects

The government has finally taken a step ahead in terms of pending reforms. This step is in the infra space where long pending projects had been impacting investors’ sentiments. According to media reports, the Supreme Court (SC), yesterday, delinked the Environment Clearance (EC) and Forest Clearance (FC) with respect to the road-widening projects. This implies that any Highway or major roads that are supposed to undergo widening need not wait for the Environment and Forest Clearance.   

In the past, there have been instances where private players like GMR have cancelled the projects of National Highway Authority of India (NHAI) stating that the road projects were due for quite some time and required the Environment and Forest Clearance, which stopped the projects from commissioning. Such cancellations have dampened the investment climate in the much needed infrastructure space.

The move by the SC was welcomed and was well accepted by the markets, especially the road sector. Reports suggest that much of the work in the road projects is towards road widening and upgrading. Also, there are many roads which need to be converted from being two-lane to four-lane and from being four-lane to six-lane. Around 24 projects are expected to get a green nod after this move which will result into a better investment cycle for companies who are awarded these projects. In India, with its huge population and the rising traffic congestion, road up-gradation is the need of the hour.

We believe that there should be a continuous flow of positive news from the government along with a green signal to long pending infra projects so as to bring back investment activity in the economy. Also, infrastructural development helps in resolving bottlenecks in various other activities, thus helping the country to grow at a faster rate.