THEBUSINESSBYTES
BUREAU
NEW
DELHI, APRIL 13, 2026
In a major push to
modernize India’s transport infrastructure, the World Bank has approved a $225
million financing package for the ambitious Rajasthan Highway Modernization
Project, aimed at improving efficiency, resilience, and safety across the
state’s road network.
The initiative is
expected to benefit over 3 million people while strengthening connectivity
across key economic corridors, driving job creation in sectors such as
agriculture, industry, mining, and tourism.
As one of India’s
largest states, Rajasthan plays a strategic role as a gateway to nearly 40
percent of the country’s markets. Despite maintaining an impressive annual
growth rate of 11 percent between 2015–16 and 2023–24, the state’s road
infrastructure has struggled to keep pace with rising economic activity.
The project will
upgrade and maintain approximately 800 km of priority highway corridors, making
them safer, more reliable, and climate-resilient. It also aims to transform the
Rajasthan State Highway Authority into a modern, service-oriented institution,
equipped to deliver long-term infrastructure solutions.
A key highlight of
the initiative is its strong focus on road safety. With improved safety
management systems and digital monitoring tools, the project seeks to
significantly reduce fatalities and accidents. Advanced traffic enforcement
systems will be deployed across 250 km of high-risk and high-density corridors,
including major tourist destinations like Jaipur and Jodhpur.
Introducing an
innovative financing approach, the project will pioneer India’s first Step Up
Loan (SuL). This model reduces financial pressure during the early, high-risk
phase of the project, with repayment costs increasing once the infrastructure
becomes operational and financially stable. The approach is expected to attract
nearly $295 million in private investment through public-private partnerships
and market borrowing, thereby easing the burden on state finances.
“Strong, sector-focused reforms combined with
private investment can generate more and better-paying jobs,” said Paul Procee.
He emphasized that improved connectivity would enable greater access to
employment opportunities, especially for women and youth, while boosting
industrial competitiveness and tourism.
The project also
targets a substantial improvement in road quality, aiming to increase the share
of highways in good or fair condition from 40 percent to 70 percent. Reduced
travel time between key logistics and economic hubs is expected to further
enhance trade efficiency and mobility.
Highlighting the project’s long-term vision, Reenu Aneja noted that the initiative adopts a “Road as a Service” model, shifting focus from mere construction to performance-based management and enhanced user experience throughout the asset lifecycle.
The funding, extended through the International Bank for Reconstruction and Development, carries a maturity period of 35 years, including a five-year grace period, providing sustained financial support for Rajasthan’s infrastructure transformation.
