Road ministry outlay to stay flat, in push for pvt capital

The Centre may keep the road ministry's allocation in the Union Budget 2026-27 nearly unchanged from the previous year's ₹2.72 trillion, aiming to shift focus towards attracting private investment, even as highway construction slows, according to two officials close to the discussions.

- Subhash Narayan

The plan is to mobilize another ₹80,000 crore for new construction by monetizing the National Highways Authority of India's (NHAI) operational assets via toll-operate-transfer (ToT), infrastructure investment trusts (InvIT), and securitization of upcoming assets, added the officials, on the condition of anonymity.

The Centre provided capital expenditure (capex) of ₹2.72 trillion (revised estimates) to the ministry of road transport and highways (MoRTH) in 2024-25, and kept it unchanged in 2025-26. "This may now increase only moderately or be maintained at the same level (again), according to the estimates shared by the MORTH with the finance ministry," said the first official.

Meanwhile, the NHAI's reliance on the budgetary allocation is likely to ease in 2026-27, as the state-owned highway builder is set to float another InvIT-Raajmarg Infra Investment Trust (RIIT) to service its debt. RIIT has received the Securities and Exchange Board of India's (Sebi) approval, with its first public issuance expected in February.

The NHAI's first InvITNational Highways Infra Trust (NHIT) had mobilized 46,000 crore across four fundraising rounds starting in 2020. As the highway builder deploys InvIT proceeds exclusively for debt repayment, its outstanding debt has declined from a peak of 3.5 trillion in 2021-22 to 2.39 trillion by September 2025.

Private capital The move also coincides with the government's efforts to attract private capital inflows back into the highway sector by awarding projects under the build-operatetransfer (BOT) model, following a hiatus since 2014.

"These measures would reduce our dependence on large doses of budgetary funds that have been maintained for the past three to four years. We are expecting that current levels of budgetary support should be maintained for a couple of years before this support could be reduced," added the first official.