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The Centre is expected to maintain its financial support for the National Highways Authority of India (NHAI) for the next decade to aid the construction and maintenance of the country's highway network. This support will remain until NHAI can generate sufficient revenue from tolls to cover its expenses. Due to high debt, NHAI's borrowing was halted for the fiscal years 2023, 2024, and 2025, causing a significant rise in budgetary allocations. However, toll revenues have shown substantial growth and are anticipated to reach INR 1,30,000 crore by 2030. NHAI's ambitious infrastructure projects include the National Highways Development Project and the Bharatmala Yojana.
To maintain transparency and sustainability, it is expected that the Centre will continue to bear the heavy capital expenditure requirements of the state-run infrastructure builder, the National Highways Authority of India (NHAI), for the next decade or so. This support will persist until NHAI can generate sufficient toll revenues to stand independently. Once the proposed highway network is constructed, the bulk of future capital expenditure will be dedicated to maintenance, thereby reducing the financial pressure on NHAI. Advertisement
An official stated that once this point is reached, the budget support from the government will be phased out, as NHAI will have enough resources generated from toll revenues.
Due to its high debt, the Centre was forced to halt NHAI's fresh borrowing for the fiscal years 2023, 2024, and 2025. Consequently, its budget support increased significantly, reaching INR 1.74 trillion in FY23, more than three times the INR 57,350 crore allocated in FY22. The budget support for FY24 was around INR 2 lakh crore and is expected to be INR 1.68 lakh crore in FY25.
Following aggressive highway expansion since the Narendra Modi government assumed power in 2014, NHAI's debt surged from INR 23,797 crore in March 2014 to INR 3.48 trillion by March 2022. This led to an increased debt servicing burden, which stood at INR 31,735 crore in FY23.
There has been a notable increase in toll collection, with receipts rising from INR 4,770 crore in 2013-14 to INR 55,844 crore in 2023-24. Road Minister Nitin Gadkari has stated that the government aims to increase toll revenue to INR 1,30,000 crore by 2030. Currently, tolls are being collected on nearly 43,000 km of highways, involving 983 toll plazas.
NHAI is tasked with implementing the National Highways Development Project (NHDP) to upgrade and strengthen national highways in seven phases. Under Phase 1 of the Bharatmala Yojana (BMP), NHAI is responsible for developing 22,660 km of highways, including economic corridors, expressways, and border roads. Phase 1 of BMP was initially expected to be completed by 2021-22 at a cost of INR 5.35 lakh crore. However, this has now been revised to 2026-27, with a projected cost of INR 10.63 lakh crore.
The length of National Highways has increased by about 1.6 times, from 0.91 lakh km in 2013-14 to 1.46 lakh km currently. The government believes that high-speed highway corridors will play a crucial role in India's transformation into a USD 30 trillion economy by 2047.
Despite the increasing debt burden in previous years, the substantial rise in toll collection demonstrates the potential for NHAI to eventually become self-sustaining, contributing to India's long-term economic growth.
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