New Delhi: In a bid to boost the post-pandemic recovery of the Indian economy, the Narendra Modi government is expected to continue its infra push in the 2022-23 budget, especially for the highway sector.
The sector is expected to see at least a 30% increase in capital expenditure in the upcoming Union budget 2022-23 – to around Rs 1.8 lakh crore from Rs 1.18 crore in the financial year 2021-22 underway, ThePrint has learned.
Finance Minister Nirmala Sitharaman will present the Union budget on February 1.
“Unlike other sectors, there is a lot of momentum in the highways sector, with work on a number of major projects including the Delhi-Mumbai and Bangalore-Chennai highways already underway. development of highways will directly lead to growth in sectors like cement and steel. The demand for labor is also increasing,” said a senior official from the Ministry of Road Transport and Highways who did not wish to be named.
“Of the total allocation for the sector, the National Highways Authority of India (NHAI) is likely to get Rs 40,000 crore more than last year,” a senior NHAI official told ThePrint under cover of a statement. ‘anonymity.
NHAI is the main road construction authority for the Centre.
According to the NHAI official, while the government is likely to increase the authority’s capital spending, its “borrowing from external sources will be reduced”. In the current financial year, NHAI was allowed to borrow Rs 65,000 crore from the market, the official added.
In recent years, the NHAI has been forced to rely increasingly on market borrowing as budget allocations have not kept pace with massive highway expansion. This has resulted in ballooning debt in recent years.
Union Road Transport Minister Nitin Gadkari Briefed the Rajya Sabha in a written response in August 2021, NHAI’s total borrowings increased from Rs 74,742 crore outstanding in March 2017 to Rs 3,06,704 crore in March 2021.
Authority debt service cost is expected to reach over Rs 61,000 crore in 2022-2023.
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Jump powered by new green highways, Bharatmala
The increased capital expenditure for the highways sector has been necessitated by a host of expensive projects including Bharatmala and the new Delhi-Mumbai and Bengaluru-Chennai highways which are already underway and require a steady flow of funds.
Under the first phase of the Bharatmala project, which has already been approved, NHAI’s goal is to develop 27,500 km of highways.
Work on the 1,380 km Delhi-Mumbai expressway is expected to be completed by March 2023. It is being constructed at an estimated cost of Rs 98,000 crore. Once ready, it will reduce travel time between Delhi and Mumbai from the current 24 hours to 12 hours.
Ministry of Roads asset monetization plan on track
To shore up finances to boost the infrastructure sector, the government had launched the National Monetization Pipeline program in August 2021 to monetize assets worth Rs 6 lakh crore between 2021-22 and 2024-25.
The Ministry of Highways was one of the first to monetize its state-funded road projects.
According to asset pipeline established by Niti Aayog, the total indicative monetization value of the listed road assets is estimated at Rs 1.6 lakh crore. Extending over 26,700 km, they constitute about 22% of the total national roads, estimated at about 1,21,155 km, excluding the network operated by the private sector under public-private partnership concessions based on construction, operation and transfer (toll).
Senior Ministry of Roads officials told ThePrint that the ministry’s asset monetization plan is on track. It monetizes completed sections of state-funded road assets in different tranches through two modes – Toll Operation Transfer (TOT) and Infrastructure Investment Fund (InvIT).
“Tenders for the sixth and seventh tranches of the TOT road assets will open today (January 28),” the NHAI official quoted above said.
So far, NHAI has received Rs 17,000 crore by monetizing its road assets through TOT.
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