To fund road construction, NHAI raises Rs 102,000 million

The Indian National Highway Authority (NHAI) raised more than 102,000 million according to the Economic Survey 2022-23. Indian and foreign institutional investors will play an important part in order to meet the ever-increasing budgetary support for constructing a nationwide road network. According to the Survey, the industry has seen an increase in the construction of national highways (NHs) and roads over time. In FY22, 10,457 km of roads were built, compared to 6,061 km in FY16. 4,060 kilometers of NHs and roads were constructed in FY23 (through October 2022), which represented approximately 91% of the achievement during the comparable period of the previous fiscal year. In the last four years, total budgetary support for sector investment has increased rapidly to approximately 1400 billion by the end of FY23 (on October 31, 2022)," the survey stated.

The government's funding for the construction of national highways has seen a significant decadal CAGR of 26 per cent from180,000 million in FY13 to 190,000 million anticipated for FY23BE. The NHAI has met approximately 90 per cent of its annual capex goal of 134,0000 million by December 2022 according to ICICI Securities.

The road ministry has constructed 5,337 kilometers of national highways (NHs) as of December 29, 2022, compared to the target of 12,200 kilometers for FY23. This results in a construction rate of approximately 34 kilometers per day for FY23. In FY15, the rate of highway construction was 12 km per day, whereas in FY22, it was 29 km per day with 10,457 km built annually. It's possible that raising money came about as a result of the government's plan to make assets in the public sector marketable. According to the statement, the National Highways Authority of India (NHAI) launched "InvIT" in the fiscal year 2022 to not only facilitate the monetisation of roads but also to attract institutional investors from both India and abroad to invest in the roads sector.

According to the survey, structural and financial reforms like the creation of Dedicated Financing Institutions (NaBFID), recapitalisation of other sectoral DFIs, the push to the PPP ecosystem through Model Concession Agreements by line ministries, and enabling social infrastructure development through the revamped Viability Gap Funding scheme complement the programmatic approach to infrastructure.