Thank you for your reply @diego-ecoswell! That's a very good point you raise.
This is what the source (Reuters) had to say about it the difficulties in collecting plastic: "But some states have been slow to embrace the technology, citing difficulties in segregating the plastic and bringing contractors on board." This in mind, hopefully any funds will go towards paying for the plastics to be segregated and finding more contractors rather than manufacturing more of it.
RE: How India Makes Roads from Garbage