The Union government has asked the National Highways Authority of India (NHAI) to continue on the path of fiscal consolidation and keep borrowings to a minimum in 2025-26 in an attempt to stop its debt ballooning to unsustainable levels.
The Budget for 2025-26 makes no provision for borrowings by the highway developer for the next financial year, the fourth straight year in a row. However, the NHAI's budgetary allocation has been increased to Rs 1.87 lakh crore, 10 percent higher than the budget estimate of Rs 1.68 lakh crore made in the previous budget and Rs 1.62 lakh crore in 2023-24.
As per the government's revised estimates, NHAI will be allocated Rs 1.69 lakh crore in 2024-25.
This was part of the government’s move to reduce the highway developer’s debt. NHAI’s debt stood at Rs 3.44 lakh crore at the end of January 2022, against Rs 24,188 crore in 2014-15, a 14-fold rise in less than seven years. The government is now looking to reduce NHAI’s 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.
Since the 2022-23 budget, the government has kept NHAI’s internal and extra-budgetary resources (IEBR) at nil. The NHAI's IEBR had falled from Rs 65,000 crore in 2021-22 to Rs 1 lakh in 2022-23. IEBR constitutes funds raised by NHAI by way of profits, loans, and equity.
The move to not borrow from the market comes in the backdrop of the central government increasing its Budgetary allocation to the Ministry of Road Transport and Highways of India to Rs 2.72 lakh crore, which is unchanged when compared to 2024-25 and the government's push for divestment and asset monetisation.
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