Somewhere near the town of Ganjam in Orissa is an unfinished railway bridge, a small incomplete strip in the ambitious Golden Quadrilateral project that links the four main cities of India. The government told Parliament earlier this month that only those 110m remain incomplete in a 5,846km project; there were raised eyebrows when former prime minister Atal Bihari Vajpayee first spoke about his plan to join the major cities with four- and six-lane highways but the Golden Quadrilateral is now held up as an exemplary public project. India has not had a similar project in the past decade.

Vajpayee had said at the time that India needs to build express highways at express speed. There was immediate economic advantage to be gained. The economy was in the midst of a slowdown so the road project was expected to create demand for commodities such as cement and steel, as well as generate employment along its route. There were subsequent benefits because of better connectivity between different parts of India which, in turn, helped lift incomes. The project was handed over to a clean and task-oriented minister, B.C. Khanduri (even though the killing of Satyendra Dubey, an engineer who complained about corruption, did sully the project’s record). It was financed by a cess on petrol rather than a general tax.

There was more to the Golden Quadrilateral project than pump priming. It was also testimony to Vajpayee’s vision. He later also backed an ambitious project to link India’s major rivers, though with less success. The highways project was a perfect example of what has sometimes been termed national greatness conservatism: “Great projects designed to physically and spiritually unify the nation,” as New York Times columnist David Brooks once described it. It is also in tune with the grand nation building projects in the Nehru era, or what were famously described as the temples of a new India. The US had its own flurry of highway building after the end of World War II. The current Chinese attempt to build high-speed railways is a contemporary example.

Such a fusion of ambition and imagination can have immense value in India at a time when the overpowering mood is of cynicism and fatigue. There has been no shortage of critics who dismiss such ambitious government projects as white elephants, but modern history shows us that projects that stretch the national imagination do have lasting value. Think of the Tennessee Valley Authority in Depression-era America or the Japanese bullet trains in the 1960s.

A more important question is who will stump up the money for such massive projects. A project of the scale of the national highways project would need around Rs.2 trillion today, if one adjusts for inflation since 2001, when construction began. The Indian government does not have that sort of money for public investment given its dire fiscal situation. But one must also remember that the two Manmohan Singh governments have spent a cumulative Rs.11 trillion on various subsidies since 2004. India would have been a better place if even half of that was diverted into useful public projects.

The only way to raise such money today is through ambitious privatization. The proceeds of these sales should be sent to a national investment fund that creates capital assets. The old habit of using the proceeds of asset sales to fund current consumption is not only suspect as an accounting practice but also damaging to the country in the long run. One recent example: the government got a Rs.1 trillion windfall in the 3G spectrum auction of 2010; the money was blown to provide fuel subsidies to vocal interests that are in no way poor.

India right now is trapped in a glum mood, firms are not ready to invest and the government does not have the fiscal space to create lasting assets. An ambitious privatization programme, the proceeds of which are ring-fenced in a national investment fund, is one way to break the deadlock. The benefits will be both economic and psychological.