Ministry of Road Transport and Highways (MORTH), is a key government ministry in India responsible for the development and maintenance of the country’s road infrastructure. It operates under the Ministry of Shipping, Road Transport, and Highways, with the primary goal of improving transportation networks, including national highways, rural roads, and expressways.
Performance in FY 24-25
The performance of the Ministry of Road Transport and Highways (MoRTH) in FY24-25 has shown a noticeable decline in terms of project execution and capital expenditure. As of December 2024, around 5,100 km of national highways were constructed, compared to 6,200 km of national highways that were constructed till December 2023. This slowdown can be attributed to fewer road projects being awarded and delayed project execution, leading to a significant dip in progress.
The reduction in project execution stems from the cabinet’s decision not to approve MoRTH’s proposal to develop 30,600 km of national highways under the Bharatmala Pariyojana, a key initiative for highway expansion. This proposal, estimated at Rs 22 lakh crore, had been expected to play a major role in accelerating road development, but its pushback led to slower project execution in FY25.
Budget Utilization
The lower-than-expected project execution resulted in underutilization of the funds allocated to MoRTH. The ministry spent between Rs 1.75 lakh crore and Rs 1.8 lakh crore on capital expenditure by December 2024 in FY25, a decline compared to the Rs 2.15 lakh crore spent during the same period in FY24.
The allocated budget has also been used by the National Highways Authority of India (NHAI) to refinance its debt, with around Rs 40,000 crore directed toward loan repayments in FY25.
Outlook for FY 26
The highway sector’s outlook for FY26 remains positive, and the government is expected to increase the highway budget for FY26 by 5-6 percent, a move that is likely to provide a much-needed boost to the infrastructure sector.
The government is likely to increase the Gross Budgetary Support (GBS) for MoRTH by 5-6 percent to Rs 2.85 lakh crore – Rs 2.9 lakh crore in FY26. This hike is expected to help the ministry fully utilize the allocated funds, accelerate project execution, and facilitate greater private sector participation through public-private partnerships (PPP).
A combination of slower project execution, fewer project awards, and underutilization of the funds allocated to MoRTH, coupled with the government’s goal of increasing private capital expenditure in the highway sector, is expected to lead to a modest hike in the GBS for the ministry in the next financial year. The government aims to push for more private participation and the monetization of highway assets to fund the accelerated development of the country’s road and highway infrastructure.
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Written by Sridhar J
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