Highway Ministry reaches 20% of April 2024 capital expenditure target

17 May 2024 CW Team

Despite experiencing a slowdown in awarding projects during the second half of 2023, the Ministry of Road Transport and Highways (Morth) continued to prioritize front-loading capital expenditure, spending over Rs 545 billion on new highway construction in April this year.

In its monthly report to the Union Cabinet, the ministry reported that it had achieved 20.04 percent of its capital expenditure target with 11 months remaining.

The ministry has been proactive in early execution of capital expenditure, following a strategy set by the finance ministry to ensure infrastructure creation does not face excessive backlogs towards the end of the financial year.

Typically, ministries are expected to ensure that at least two-thirds of their capital expenditure is spent by the end of the second quarter. Although the highway ministry has consistently maintained double-digit percentage shares in capital expenditure in previous years, this is the first time it has begun a financial year having spent over Rs 500 billion.

Experts note that there is still a healthy pipeline of projects from the NHAI, and the impacts of the Bharatmala slowdown are expected to be more pronounced in FY26.

Additionally, the ministry had anticipated a decline in construction (and consequently capital expenditure) starting FY25 due to delays in the approval of the Revised Estimates of the Bharatmala project, which had seen a Rs 5 trillion increase in costs.

In November 2023, the ministry informed the cabinet that the shortfall in awards for the current year would affect construction progress in FY 2024-25.

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