The Indian government has set an ambitious target of awarding 12,900 kilometers (km) of highway projects in the current financial year, aiming for a 50% increase over last year’s figure. This goal is part of an effort to address a slowdown in construction activity, with officials working to make up for the gap created by delays earlier in the year.
Despite the challenge, which saw awards of less than 3,000 km by mid-year, progress has picked up since then. In the first quarter, only 95 km of highways were awarded. However, in subsequent months, the pace of awarding accelerated, with over 600 km awarded monthly, and November seeing 773 km of highway projects being given out. The government expects the bulk of the awards to be made in March, as is customary, with a substantial portion of last year’s total being awarded in the final month. In the 2023-24 fiscal year, 8,581 km of highways were awarded, falling short of the 13,290 km target. This shortfall was partly due to a halt in fresh contracts under the Bharatmala highway development program, which impacted awards by the National Highways Authority of India (NHAI).
ICRA’s Vinay Kumar G expressed that the ambitious target for this year may align more closely with last year’s levels, given the challenges faced. Last year, NHAI achieved only 3,339 km of awards, falling well below its 6,000 km target. The government had temporarily paused new projects under the Bharatmala program, affecting overall awards. However, the roads wing of the Ministry of Road Transport and Highways (MoRTH), responsible for expressways and critical highways, is expected to lead the awarding of national highway projects this year.
This year’s focus will shift toward creating additional capacity on existing highways, rather than launching entirely new ones, especially in areas like the Golden Quadrilateral and Naxalite-affected regions. The Public Works Department of various states and Union Territories executes the majority of these works.
The government has also set a provisional target of constructing 10,400 km of national highways, which is 15% lower than last year due to delays in state clearances caused by prolonged elections. So far, 4,761 km of highways have been built, and NHAI has been tasked with constructing 5,000 km of the total. By November, NHAI had completed 2,563 km of construction and awarded contracts for 776 km.
As the government pushes forward with its plans, the focus will remain on improving infrastructure and streamlining the award process, ensuring the delivery of essential road projects that will drive India’s economic growth.
