In the upcoming Union Budget 2024-25, the government is expected to maintain its focus on infrastructure development. According to a report in Mint, there are potential plans to increase capital expenditure allocations for the Ministry of Road Transport and Highways (MoRTH) for FY25.
The increase in allocations is likely to be moderate. This jump could be between 5 per cent to 10 per cent over the revised estimates of FY24, the report said. Road construction projects is expected to see a significant increase in private sector investments, particularly under the build-operate-transfer (BOT) toll model.
Private investments in FY24 reached Rs 34,805 crore and are projected to nearly double in FY25, up from Rs 20,000 crore in FY23.
Did roadways get enough allocation in Interim Budget?
Finance Minister Nirmala Sitharaman presented the Interim Budget 2024-25 on February 1 which included a modest increase in budget allocation for the road sector compared to the previous year.
In the Interim Budget, the government allocated Rs 2,78,000 crore for the MoRTH, a rise of 2.7% as compared to the Rs 2,70,434 crore allocated in 2023-24. However, the revised allocation for the ministry for the fiscal year 2023-24 was Rs 2,76,351.45 crore, making the new allocation only 0.5% higher.
A higher allocation will help boost highway construction and address the substantial Rs 3.5 trillion debt accrued by the National Highways Authority of India (NHAI) by the end of FY24. The government aims to construct 12,000 to 13,000 km of national highways and award contracts for a similar distance to maintain progress in highway development over the coming years.
