The Union government has asked states to notify 15-metre non-development barriers along future ring roads and bypass roads and regulate construction in wider 2-km impact zones around them as part of the urban congestion decongestion policy to curb strip development that creates congestion on highways.
Strip development refers to the unplanned growth of buildings, shops, warehouses, petrol stations and residential colonies along major roads and highways outside the planned municipal boundaries.
The Ministry of Road Transport and Highways’ framework seeks to increase state participation in financing urban congestion relief projects through multiple cost-sharing models, including a 50:50 split in land acquisition costs, land pooling, reimbursement of state GST and royalties, and a value capture mechanism that allows governments to recover part of the increase in land value generated by highway projects and use it to fund ring roads and bypass roads.
The move comes amid growing concerns that bypass roads and ring roads built to ease congestion often lose their effectiveness within a decade as residential colonies, commercial establishments and local roads sprout along their edges. Long-distance freight and passenger traffic is increasingly mixing with local traffic, slowing down movement and undermining the purpose of the original investment.
A previous assessment of cities with populations of more than 500,000 found that 80 urban centers recorded more than a 10% drop in highway speeds as traffic moved through them, the ministry said. While projects are underway in some locations, there is still a need to plan interventions in 48 cities.
This phenomenon is visible in many major urban centres. Bengaluru’s Outer Ring Road, designed as a peripheral mobility corridor, has evolved into one of the city’s largest commercial and residential hubs, hosting technology parks, offices, shopping malls and residential developments. Similar trends have emerged around peripheral road networks in Hyderabad, Pune and parts of the National Capital Region, where infrastructure built to ease congestion in cities has generated new traffic demand.
To prevent this cycle from recurring, all future urban congestion relief projects on national highways will be developed as fully access-controlled corridors with a minimum four-lane configuration and closed toll systems. This will help maintain operating speeds of 100-120 kilometers per hour by separating traffic from local urban movement, the ministry said.
Countries will be required to notify a 15-metre restricted development control zone extending on either side of new bypass roads and ring roads. The buffer zone will only allow infrastructure related to public utilities and transportation, such as power lines, water pipelines, sewage networks and bus stations. Beyond that, states may create a regulated development zone extending up to two kilometers on either side of the corridor for planned residential, commercial, industrial and institutional development.
To finance future projects, the policy outlines four models for state participation: land acquisition cost sharing, reimbursement of the government portion of GST, land pooling, and value creation financing. Under the value capture mechanism, states levy fees linked to land use changes, development fees, improvement fees or stamp duty surcharges within the impact area of the bypass or ring road and share a portion of the revenue with the Center for up to 15 years.
The ministry said highway projects often bring huge windfall gains to landowners, with property values rising sharply after new infrastructure is built. The value capture framework seeks to channel a portion of these gains back into public infrastructure.
The policy encourages states to adopt land pooling models used in Haryana, Andhra Pradesh and Gujarat to reduce acquisition costs while allowing landowners to benefit from planned development.
The framework requires projects to be planned with a horizon of up to 50 years, taking into account expected urbanization and demographic growth. It also requires integration with city master plans and the PM Gati Shakti platform to better align highway development, logistics infrastructure and urban growth.
