How are India's roads funded? Investment in national highways down in FY22

The money spent on building roads has more than doubled since the financial year 2015-16 (FY16), though funding has often emerged as a challenge.

Private investment plays a limited role despite the recent increase, shows an analysis of data from rating agency Crisil. It accounted for less than a fifth of the expenditure in FY22, similar to levels seen in FY16 (chart 1).  

 

The data covers national highways, state and rural roads.

Road transport minister Nitin Gadkari recently spoke of the need for innovative methods to boost India’s infrastructure growth.

National highways have seen rising spends, except for the last year. The FY22 number shows a dip over the previous year — the first such decline in years (chart 2). The share of the private sector is slightly higher here, at 17 per cent in FY22.

 

The expenditure on state roads has been going up. It was 27 per cent higher than national highways in FY22. This comes after many years of national highway spends closing the gap on state roads. The smallest increase in expenditure has been for rural roads. It is up 49 per cent since FY16, compared to 72 per cent for state roads and 401 per cent for national highways (chart 3).