India’s Highway Construction Drops by 5.8% in April-December 2024, Still Surpasses Targets
India’s highway construction activity saw a dip in the first nine months of the current fiscal year, with a 5.8% decline compared to the same period in the previous year. As of December 2024, nearly 5,283 km of highways were constructed, down from 6,216 km in the same months of 2023. Despite the drop, the rate of road building is still ahead of the Ministry of Road Transport and Highways’ (MoRTH) target for the fiscal year, suggesting that construction is continuing at a steady pace despite challenges.
The government had set an ambitious target of constructing 10,421 km of national highways during FY2024-25, which represents a 15% reduction from last year’s target of 12,300 km. The reason for the adjusted target can be attributed to delays in receiving state clearances due to elections and a prolonged monsoon in 2024, which affected the pace of construction. While the target was reduced, the actual progress in highway construction stands at 5.8% lower than last year’s figures, which is an improvement on the expected 15% shortfall. This indicates that the slowdown in construction is not as severe as initially anticipated. The National Highways Authority of India (NHAI) has been tasked with building 5,000 km of the target, while the remaining construction will be undertaken by the National Highways and Infrastructure Development Corporation (NHIDCL) and the road wing of MoRTH.
In the period from April to December 2024, NHAI successfully completed 3,528 km of highways and awarded contracts for 1,534 km of new roads. While the award of new projects slowed down significantly due to the lack of a clear long-term plan following the cessation of Bharatmala’s award process last year, the pace of ongoing construction has remained stable. New projects for highway development are now expected to fall under the Vision 2047 plan, though specific targets have yet to be outlined under this new framework. The shift in strategy is meant to allow greater flexibility in responding to changing priorities and resource availability, with projects being initiated on a case-by-case basis. In terms of highway project expenditure, the Ministry of Road Transport and Highways has allocated Rs 2.25 lakh crore for highway development in the period from April to December 2024. This figure represents 82.7% of the total expenditure target for the year, which stands at Rs 2.72 lakh crore. Last year, the ministry had spent Rs 2.15 lakh crore in the same timeframe, which accounted for 83.5% of its target.
The slowdown in awarding new highway projects since last year is expected to impact the pace of construction in the next fiscal year (2025-26). However, analysts predict a potential recovery in the construction sector by 2026-27, with a sharper uptick in highway development as the government continues to focus on infrastructure as a key driver of economic growth. Despite the challenges of the last year, the ongoing development of India’s highways remains a significant achievement. The government’s efforts to accelerate infrastructure growth through strategic initiatives like Vision 2047, alongside increased private sector participation, are expected to play a crucial role in the country’s road transport development in the coming years.
