Traffic on Indian roads set to grow 14% as economy rebounds, says Crisil

Traffic on the Indian roads is expected to witness an increment of 14% this year as the country's economy rebounds from the effect of the coronavirus pandemic, as per analytics firm Crisil Ltd. Economic recovery will lead to a trend spurring demand of petrol and diesel, thus also bringing more vehicles on to the roads.Traffic surged 57% from a year earlier last quarter as pandemic-related curbs began to ease and there was also a revival in the industrial production. There has also been a rising trend of people choosing personal cars over shared transport amid the fear of transfer of infection. However, the recovery could be short-lived as a possibility of third wave lingers, Crisil stated.(Also read | Traffic e-challan to be issued in 15 days as Centre tightens noose for violators)

In 2020, traffic fell 5% after the country went into lockdown, Crisil stated, without providing a total figure or forecast for vehicles on the country's roads. As per a report from the Ministry of Road Transport and Highways, there were about 296 million vehicles registered in the country as of 2019.

Coming to the players in the automotive ecosystem, the analytics agency said that coronavirus-related disruptions and global shortage of semiconductor chips have left the country's automakers struggling. Various supply-ch disruptions have hampered their production. Recently, the country's largest carmaker Maruti Suzuki informed that its output will likely drop as much as 40% in September due to semiconductor shortage while Tata Motors has also had to cut down on production.

Crisil further stated that the credit profiles of the players in the road sector will stay strong . "Their debt-servicing ability has not deteriorated due to the pandemic-related disruptions," said Anand Kulkarni, a director at Crisil.

(with inputs from Bloomberg)