Highway Construction Drops by 5.8% in April-December 2024, Targets Adjusted for FY 2025
India’s highway construction sector has experienced a modest slowdown in the first nine months of the 2024-25 fiscal year, with a 5.8% decline in progress compared to the same period last year. According to the Ministry of Road Transport and Highways (MoRTH), 5,283 km of highways have been constructed between April and December 2024, falling short of the 6,216 km built in the corresponding period of the previous year. However, the rate of construction is still outperforming the government’s initial projections for the year.
The government had set a provisional target of constructing 10,421 km of national highways for the fiscal year, which represents a 15% reduction compared to last year’s achievement of 12,299 km. This cut in targets was mainly due to delays caused by the election process in various states and the prolonged monsoon season in 2024, which hampered construction activities. Despite the setbacks, the decline in highway construction has been relatively modest at 5.8%, much lower than the anticipated 15% drop.
Of the revised 10,421 km target, the National Highways Authority of India (NHAI) has been assigned the responsibility for constructing 5,000 km, while the remaining portion will be carried out by the National Highways and Infrastructure Development Corporation (NHIDCL) and the road wing of MoRTH. As of December 2024, NHAI has successfully constructed 3,528 km of highways and has awarded contracts for an additional 1,534 km. This shows that NHAI continues to make steady progress in its road-building initiatives, even though the pace has slowed in comparison to previous years. The total awards for new highway projects during the first nine months of FY 2024-25 stood at 3,100 km, which is marginally lower than the 3,111 km awarded in the same period last year. Notably, no specific target for new project awards has been set for the current fiscal year, as the government has shifted its focus away from the previous Bharatmala initiative. In its place, Vision 2047 has been introduced, although a concrete target or roadmap for this new initiative has yet to be officially defined. Moving forward, highway projects will be undertaken based on priority, consultation with various economic ministries, and resource availability.
The slowdown in both the awarding of new projects and the construction of highways is expected to affect the overall pace of road infrastructure development in India in the coming years. Analysts suggest that this delay may continue to impact highway construction in the 2025-26 fiscal year, with a recovery not anticipated until 2026-27. This means that while the government has taken steps to address the slowdown, it may take several years before the industry returns to the fast-paced construction levels seen in previous years. Further evidence of the slowdown is seen in the Ministry’s expenditure on highway development. Between April and December 2024, the government spent Rs 2.25 lakh crore on road construction, which is 82.7% of the target expenditure of Rs 2.72 lakh crore for the financial year. This is slightly higher than the Rs 2.15 lakh crore spent in the same period last year, which represented 83.5% of that year’s target.
For the general public and businesses, the delay in highway construction is a concern, as road infrastructure is crucial for economic growth, better connectivity, and ease of travel. While the government has managed to keep the decline in construction lower than expected, the longer-term effects of delayed projects could affect regional economies, especially in areas that rely on better connectivity for trade and business activities. As the government continues to adjust its strategy under Vision 2047, people remain hopeful that this long-term planning will eventually result in the timely delivery of critical infrastructure. However, stakeholders are also concerned about the ongoing delays and the lack of concrete targets for the Vision 2047 plan. The next few years will be crucial in determining whether these ambitious goals can be met and whether the nation’s roads can be revitalised to keep up with growing demands. While India’s highway construction sector is facing temporary setbacks, the government’s revised targets and the shift to Vision 2047 provide a sense of direction. As the financial year progresses, stakeholders will be looking closely at the pace of road development to ensure the country’s infrastructure meets future needs.
