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Leveraging Land Value for Infrastructure Boost

In an effort to boost funding for vital infrastructure projects, the Indian government is actively investigating inventive policy approaches to capitalize on the increasing land values adjacent to road developments. The Ministry of Road Transport and Highways (MoRTH) has launched a comprehensive examination of global best practices to identify effective financing methods for its ambitious expressway projects, with a final decision expected after the new government assumes office.

The proposed strategy, currently under MoRTH’s scrutiny, aims to utilize the rising land values along upcoming expressways to finance future infrastructure initiatives. A government official emphasized that this endeavor aligns with the ministry’s long-term vision of sustainable development.

There is a consideration of a ‘betterment’ levy, where property owners benefiting from government infrastructure developments, particularly those near expressways, would be subject to a one-time charge based on their proximity to the expressway.

The concept of land value capture, recognized globally to generate revenue for public services, has gained attraction in various countries.

The Indian government’s aim is to tap into the heightened land values surrounding highway projects, benefiting real estate developers while also bolstering funding for public infrastructure. This initiative is crucial as India aims to secure over Rs 20 lakh crore by 2030 to overhaul its road infrastructure.

In addition to the land value capture strategy, the government is exploring avenues for asset monetization such as toll-operate-transfer and infrastructure investment trust modes to raise funds for its ambitious projects. This concerted effort underscores the government’s commitment to enhancing the nation’s infrastructure landscape through innovative financing mechanisms.