The Indian Government has ordered the National Highways Authority of India (NHAI) to compensate developers for delays in road projects not attributable to them, which will benefit 34 stalled projects of around 3,500km.

This decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA), which was chaired by prime minister Narendra Modi.

In a statement, the government said: "The CCEA has given its approval for authorising National Highways Authority of India (NHAI) to allow extension of concession period for all current projects in BOT (toll) mode that are languishing during the construction period due to causes not attributable to the concessionaire."

"The cabinet has taken a very bold decision to allow the ministry of road transport and highways to go into the merits of each case."

The decision is expected to unlock investments worth $350bn ($5.2bn). Many of these projects have been stalled because of government clearances for land acquisition and environmental approvals.

Union coal and power minister Piyush Goyal was quoted by The Economic Times as saying: "The cabinet has taken a very bold decision to allow the ministry of road transport and highways to go into the merits of each case and wherever the delays are not attributable to the developer, to extend the tolling period if that should be required and take such measures, which will once again revive these toll projects and get them to operation."

However, the relief to developers comes with several clauses, including a project completion time within three years.

NHAI will take the initiative to call the developers and bankers to sort out any issues and aid in releasing funds.

Meanwhile, the government also authorised India’s Ministry of Road, Transport & Highways (MoRTH) to approve projects carrying civil construction costs up to Rs10bn ($151m).

In the last few months, the central government has been able to unlock more than 280 projects valued at Rs3tn ($45bn).

Until now, all road projects, which cost more than Rs10bn, needed the approval of the ministry of finance, as well as that of CCEA. However, by eliminating the land cost from total project cost, most road projects will fall within the threshold, which will enable the road ministry to clear it, thereby removing barriers in speedy approvals. In most projects, land forms 40% of the cost of projects.