The Union government may relax exit norms for highway developers, a move which will increase mergers and acquisitions in the road construction sector of India. At present, there are limits on the extent to which a lead project developer can exit from a project, with time-based milestones. Relaxation of this norm has been a long-standing demand of developers and the Cabinet may soon take up a proposal in this regard.

The idea of relaxing exit norms is to allow private equity investors, or developers with deeper pockets to step into the shoes of an existing highway developer who wants to exit from a particular highway project. The exit norms are part of the contract ? also called concession agreement ? signed between road developers and the National Highway Authority of India (NHAI).

Changing the exit norms would mean changing contract conditions, so a Cabinet nod is required. The Highways Ministry and NHAI support the move, but there were disagreements from departments such as Planning Commission on relaxing this clause. But, there were indications of Finance Ministry supporting the relaxation in the Economic Survey.