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NHAI exceeds FY26 highway construction target by 15%

April 01, 2026 5 min read Economics Polity & Governance GS3
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What Happened

  • The National Highways Authority of India (NHAI) constructed 5,313 km of national highways in FY2025–26, exceeding its annual target of 4,640 km by 15%.
  • Capital expenditure for the year stood at over ₹2.44 lakh crore — approximately 2.5% higher than the government's budgetary support of ₹2,38,384 crore — with the ₹5,978 crore shortfall met through NHAI's own internal resources.
  • NHAI also achieved ₹28,307 crore in asset monetisation in FY26 through a combination of Public InvIT (Infrastructure Investment Trust), Private InvIT, and Toll-Operate-Transfer (TOT) mechanisms, approaching but falling slightly short of the ₹30,000 crore target.
  • The Union Budget 2026 allocated ₹3.10 lakh crore to the Ministry of Road Transport and Highways (MoRTH), reflecting continued government prioritisation of road infrastructure as a growth multiplier.

Static Topic Bridges

NHAI, BharatMala Pariyojana, and the National Highway Expansion Mission

The National Highways Authority of India was established under the National Highways Authority of India Act, 1988, and began operations in 1995. It is the nodal agency under the Ministry of Road Transport and Highways (MoRTH) responsible for the development, maintenance, and management of national highways. BharatMala Pariyojana, launched in 2017 as an umbrella programme, represents the government's flagship road network expansion initiative. Phase I targets approximately 34,800 km of roads (including 24,800 km under BharatMala and 10,000 km of balance NHDP works) aimed at building Economic Corridors, Inter Corridors, Ring Roads, and National Corridor improvements. As of March 2024, approximately 50% of BharatMala Phase-I had been completed; full completion is projected by 2027–28.

  • NHAI established: National Highways Authority of India Act, 1988; operational from 1995
  • BharatMala Pariyojana Phase-I: ~34,800 km; estimated project cost ~₹5.35 lakh crore (revised); 50% complete by March 2024
  • Economic Corridors: High-density freight routes connecting major production/consumption centres
  • NH network total (2025): ~1.46 lakh km of national highways (compared to ~91,287 km in 2014)
  • NHDP (National Highways Development Programme): Pre-BharatMala highway expansion programme that built the Golden Quadrilateral, North-South/East-West corridors
  • MoRTH Budget (FY2026): ₹3.10 lakh crore — among the highest sectoral allocations

Connection to this news: NHAI's FY26 over-performance demonstrates execution capacity improvement after years of land acquisition and approval-related delays. The use of internal resources to plug the ₹5,978 crore budgetary gap signals financial maturity of the agency.

Infrastructure Investment Trusts (InvITs) and Toll-Operate-Transfer (TOT)

Infrastructure Investment Trusts (InvITs) are SEBI-regulated trust vehicles that pool investor money to invest in infrastructure projects (roads, power lines, etc.) and distribute revenues to unit holders. They allow infrastructure developers to recycle capital — monetising operational assets and redeploying funds into new construction. NHAI's Public InvIT (listed on stock exchanges) and Private InvIT (for institutional investors) are the primary instruments through which it monetises completed national highway projects. The Toll-Operate-Transfer (TOT) model is a concession-based mechanism where NHAI bundles operational tolled highways and transfers them to private operators for a lump-sum upfront payment, with the operator earning toll revenues for a defined concession period (typically 30 years).

  • SEBI regulates InvITs under the InvIT Regulations, 2014 (amended periodically)
  • NHAI InvIT (Public): Listed; allows retail and institutional investors to participate in highway revenues
  • TOT Model: Lump-sum payment to NHAI upfront; operator earns toll revenue over concession period (typically 30 years)
  • FY26 Monetisation: ₹28,307 crore via Public InvIT + Private InvIT + TOT; target was ₹30,000 crore
  • National Monetisation Pipeline (NMP): Launched 2021; estimates ₹6 lakh crore monetisation potential from brownfield assets over FY22–25; highways are the largest single asset class (~₹1.6 lakh crore)
  • Asset monetisation ≠ privatisation: Government retains ownership; only operational rights transferred for a defined period

Connection to this news: NHAI's ₹28,307 crore monetisation performance illustrates the National Monetisation Pipeline in action — using completed brownfield highways to fund new greenfield construction without burdening the fiscal deficit.

PM Gati Shakti and Capital Expenditure as Growth Multiplier

PM Gati Shakti — National Master Plan for Multi-modal Connectivity was launched on October 13, 2021. It is a GIS-based digital platform integrating 44 central ministries and 36 states/UTs through 1,600+ data layers to enable coordinated infrastructure planning. The platform incorporates BharatMala, Sagarmala, UDAN, inland waterways, and dry port schemes for seamless multi-modal connectivity. Separately, the National Infrastructure Pipeline (NIP), launched in 2019 with a ₹102 lakh crore target by 2025, identified roads as among the top investment sectors (along with energy, urban, and railways). In macroeconomic terms, infrastructure capital expenditure (capex) is considered to have a high fiscal multiplier — studies estimate government capex has a multiplier of 2–3x over the medium term, meaning ₹1 of government road investment generates ₹2–3 of GDP output.

  • PM Gati Shakti: Launched October 13, 2021; GIS platform; 44 central ministries, 36 states/UTs onboarded; 1,614 data layers
  • National Infrastructure Pipeline: ₹102 lakh crore target by 2025; roads, energy, urban, railways = ~70% of NIP capex
  • Fiscal multiplier of infrastructure capex: Estimated 2–3x (IMF estimates); NHAI capex directly impacts logistics costs, which feed into inflation
  • NHAI's capital expenditure (FY26): ₹2.44 lakh crore — exceeds budgetary support of ₹2.38 lakh crore
  • India's logistics cost as % of GDP: ~13–14% (vs. ~8% in developed countries); highway improvement a key lever to reduce this
  • NHAI Bond Financing: NHAI also raises funds through tax-free and taxable bonds in capital markets

Connection to this news: NHAI's decision to supplement budgetary support with internal resources (₹5,978 crore gap) demonstrates that PM Gati Shakti's integration approach is enabling agencies to maintain capex momentum independent of short-term fiscal fluctuations.

Key Facts & Data

  • NHAI FY26 construction: 5,313 km (target: 4,640 km; achieved 15% above target)
  • FY26 Capital expenditure: ₹2.44 lakh crore (budgetary support: ₹2.38 lakh crore; NHAI own resources: ₹5,978 crore)
  • FY26 Monetisation: ₹28,307 crore via Public InvIT, Private InvIT, and TOT (target: ₹30,000 crore)
  • MoRTH Budget FY2026: ₹3.10 lakh crore
  • National Highway network (2025): ~1.46 lakh km (vs. ~91,287 km in 2014)
  • BharatMala Phase-I: 34,800 km; 50% complete by March 2024; full completion by 2027–28
  • PM Gati Shakti launched: October 13, 2021
  • National Monetisation Pipeline (2021): ₹6 lakh crore total; highways = largest class (~₹1.6 lakh crore)
  • NHAI established: 1988 Act; operational from 1995; under MoRTH