Election slows highway construction despite big capital investment

The data showed that highway construction stood at 1,288 km in April-May, down 12 percent from 1,465 km in the same period last year. Moreover, the roads ministry in an office note on Friday said that “due to the implementation of the Model Code of Conduct”, the government awarded only one road project of four km in the two months, a significant drop compared to the 382 km of road projects in the same period last year.

The restrictions for the seven-phase general election, which took place from April 19 to June 1, came into effect on March 16, with the results announced on June 4.

High capital investment

The ministry said: ₹57,925 crores — 42.55% of the total expenditure. ₹To keep the government running during the election period, Congress approved a $1.36 trillion budget for the first five months of 2024-25.

The 2024-25 interim budget ₹The road ministry has an expenditure of $2.72 trillion for the entire fiscal year. Also, in terms of annual allocation, the government has already spent 21.3 per cent of the budget estimate, up from 20.83 per cent in the same period last year.

“This year we are moving even faster towards allocating budgetary capex funds for infrastructure development. Nearly half of the budgetary capital expenditure has been spent in just two months and the entire amount approved is likely to be spent much ahead of the five-month period,” a MoRTH official said on condition of anonymity.

This will ensure that construction of the highway will be accelerated after the monsoon season, the official added.

The ministry has yet to finalize its highway construction target for this fiscal year, but officials said it will be the same as last year, at 12,000 to 13,000 kilometers.

Expressway Construction Goals

Indeed, the ministry completed a number of DPRs during the election period, which should result in a healthy project pipeline for the remainder of the fiscal year.

“As has been typical in previous financial years, the pace of highway construction will pick up in the second half of the year,” said Ashish Suman, partner at JSA Advocates & Solicitors.

India has constructed a total of 12,349 km of highways in 2023-24, the second-highest figure for any financial year. The country built a record 13,327 km of highways in the COVID-hit fiscal year 2020-21.

Further, for the first time, MoRTH has exhausted its entire budgeted expenditure for FY 2023-34 and has disbursed 99.93% of the revised capital expenditure for FY 2023-34. ₹$2.64 trillion in 2023-24.

The ministry’s capital expenditure has remained above 90% for the past five years. In fact, it was above 98% for three of the five years. Fund utilisation rates were 91% and 93% for fiscal years 2019-20 and 2021-22, respectively, officials said.