While the Ministry of Road Transport and Highways initially intended to utilize over 90 per cent of its Rs 2.59 lakh crore capital expenditure allocation for the financial year 2023-24 by December 2023, officials have reported a slowdown in project awards since July
In a strategic move to propel infrastructure development and minimize market borrowings for the National Highways Authority of India (NHAI), the Ministry of Road Transport and Highways has sought a 25 per cent increase in budgetary allocation for the year 2024-25. This proposal, amounting to Rs 3.25 lakh crore, reflects the government's commitment to fortifying the country's road network while strategically managing NHAI's financial obligations, government officials told Business Today TV.
The decision to seek a higher budget comes on the heels of a challenging year marked by obstacles, including project delays attributed to unpredictable weather conditions and state elections. The Ministry is gearing up for a proactive approach in the upcoming fiscal year, with a focus on substantially increasing the number of project awards to fortify capital expenditure, said an official.
A senior government official said, "as part of the government’s strategy to bolster NHAI's balance sheet through heightened budgetary support and zero market borrowings, we have proposed a up to 25 per cent hike in budget allocation for 2024-25." This emphasis on minimizing market borrowings aligns with NHAI's recent trend, with expectations that the authority will conclude the current fiscal year with borrowings of less than Rs 1,000 crore for the second consecutive year.
NHAI market borrowings have remained negligible for two consecutive years, and officials anticipate this trend to persist in 2024-25. The government is actively working towards reducing NHAI's debt, which reached Rs 3.44 lakh crore as of January 2022, with a target to bring it down to Rs 1 lakh crore by 2024-25. This reduction in debt aims to position NHAI on a more financially sustainable trajectory.
Moreover, the government expresses optimism regarding the anticipated approval of the revised Bharatmata Phase-I program by 2024-25. This approval is anticipated to inject momentum into project awards and construction activities in the forthcoming fiscal year.
While the Ministry of Road Transport and Highways initially intended to utilize over 90 per cent of its Rs 2.59 lakh crore capital expenditure allocation for the financial year 2023-24 by December 2023, officials have reported a slowdown in project awards since July. Factors such as heavy rains, delays in land allocation, and elections in five states have contributed to the slowdown in project implementation.
