Budget 2024-25: Highway capital expenditure may rise up to 10%

Experts understand it as reasonable, given the high base the highway budget is operating on due to back-to-back bumper hikes in the previous two financial years

The Centre is considering a 5-10 per cent increase in capex deployment for highway development in the country in the upcoming Union Budget for 2024-25, according to senior government officials.

The ministry of road transport and highways was allocated Rs 2.72 trillion for capital expenditure in the interim Budget presented by finance minister Nirmala Sitharaman in February. At that point, the spending on highway construction was pegged at 2.9 per cent higher than the revised estimates of 2023-24. Experts believe the amount is reasonable, given the high base the highway budget is operating on due to back-to-back bumper hikes in the previous two financial years.

 

As of May, the highway ministry has already absorbed over Rs 57,000 crore of its allocated capital spending budget for the ongoing fiscal, which is approximately 22 per cent of the total. 

Over the past few years, capital-intensive ministries have been asked by the finance ministry to front-load their expenditure to meet targets. Since 2020, most infrastructure ministries have overshot their capex targets.

“The capital expenditure so far is being done on projects that were awarded in the past few years. With new projects and recently awarded projects kicking in, capital expenditure should only increase going forward,’’ a senior official pointed out. He added that deliberations will go on in the run up to the Budget, but it is reasonable to expect a 5-10 per cent hike in highway capex.

Queries sent to the ministry of road transport and highways remained unanswered till the time of going to press.

The highway ministry will look to start awarding new projects and projects pending in the first phase of the Bharatmala Pariyojana, the ministry’s flagship Rs 5 trillion programme, the cost estimates for which have risen to Rs 10 trillion due to delays in land acquisition and other factors.

The plan has now been subsumed under a new Vision 2047 Cabinet note by the highway ministry. The plan,  currently being deliberated at the Union cabinet level,  will entail spending of Rs 20 trillion for the ministry to meet its targets under the Viksit Bharat 2047 document – a government-wide initiative to identify sector-wise gaps and improve on them to make India a developed country by 2047.

The vision now is not just to look at national highways as number of kilometres, but quality as well, highway secretary Anurag Jain had told reporters in February. 

According to ministry data shared by officials earlier this year, highways with four lanes and more have increased by 2.5 times to 46,720 kilometres (km) over the last 10 years, while those with two lanes or less have halved to 14,350 kilometres, which are now only 10 per cent of the total highway network.