GS Paper - 3 Infrastructure (Road)

The National Highways Authority of India (NHAI) approved the land acquisition policy based on value capture finance. Value capture finance or VCF is a type of public financing that recovers some or all of the value that public infrastructure generates for private landowners. The norms approved by the NHAI seek to devise a mechanism to implement VCF, jointly by the states and NHAI, to part finance the cost of highway construction in order to make them viable.


  1. Bharatmala Pariyojana provides for Grand Challenge Mechanism to take up projects on fast track where sufficient and timely land is made available by the state government.
  2. In addition, if the state government provides at least 25% of the land acquisition cost for bypass projects, then such projects will be taken up on priority.
  3. The authority has allowed states to share the enhanced value of land in the project impact area or 1 km on either side of the greenfield/brownfield highway within the methods prescribed by the NHAI.
  4. The states may explore the possibility of development of residential/commercial real estate in the project impact zone for which connectivity to the main highway/service road may be given by NHAI.
  5. The Ministry of Road Transport and Highways has been grappling with higher land acquisition cost for the past few years.
  6. Approximately, a cost of ~12 crore per km is incurred in the expansion of a highway from two-lane to four-lane and the number would be five-six times higher in a greenfield project like an expressway.