The ministry of road transport and highways (MoRTH) saw its allocations remain unchanged in first full budget of Modi 3.0 with an allocation of Rs 2.72 lakh crore for 2025-26, which is largely unchanged from the previous year.
The budgetary allocations will help in developing more highways and expressways amid rising interest rates and increasing cost of land.
Of the total Rs 2.72 lakh crore, the National Highways Authority of India (NHAI) has been allocated around Rs 1.87 lakh crore as part of MoRTH’s capital expenditure plan for 2025-26, a 10 percent increase from 2024-25, when it was allocated Rs 1.68 lakh crore.
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According to revised budgetary estimates , NHAI will spend around Rs 1.69 lakh crore in 2024-25. The rise in allocation is in line with the government’s strategy to recapitalise its balance sheet with higher budgetary support and zero market borrowings.
The 2025 Budget makes no provision for borrowings by the highway developer for the next financial year.
Further, road stocks also sulked in trade, with names like IRB Infrastructure Developers, NCC, Ashoka Buildcon, Dilip Buildcon and more cracking up to 8 percent, as investors offloaded their holdings on the stocks after seeing little thrust for the sector in the Union Budget 2025-26.
This is the fourth straight year when the NHAI's market borrowing has been set as negligible. In 2022-23, the government had asked the highway developer to limit its borrowings. As per the government's revised estimates, the NHAI will spend no money as IEBR in 2024-25. IEBR comprises funds by way of profits, loans, and equity.
NHAI’s debt stood at Rs 3.44 lakh crore at the end of January 2022, as against Rs 24,188 crore in 2014-15, a 14-fold rise in less than seven years. The government was looking to reduce its debt to Rs 1 lakh crore by 2024-25.
The NHAI’s debt was pegged around Rs 3.3 lakh crore at the start of April 2024. It is now estimated to be around Rs 2.8 lakh crore.
The government had set a target of 13,000 km, 13,800 km and 14,00 km of highway construction in 2022-23, 2023-24 and 2024-25 but the speed of work was affected by unfavourable weather conditions and elections.
The ministry is likely to complete 10,000 km of national highways this fiscal year after constructing 12,350 km in FY24 and 10,993 km of highways in FY23, miistry officials have said.
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