economy

Govt looks for major infra push with 30% budget hike for highways

Govt looks for major infra push with 30% budget hike for highways

NEW DELHI : The Union Budget will propose a massive 30% increase in allocations for the ministry of road transport and highways to speed up the construction of about 50km of highways per day, two people aware of the plans said. The hike in allocations will take the budget for the ministry (MoRTH) to more than ₹1.5 trillion, its highest ever. Most of the money will be used to build transport infrastructure—the key to propelling economic growth. Questions emailed to the finance ministry on the proposed move remained unanswered when going to press. The allocation for MoRTH stood at ₹1.18 trillion in 2021-22. The people cited above said that though this would be sufficient to speed up highway development, more allocations should be considered as the sector is already working on expanding the network of large expressways such as the Delhi-Mumbai Expressway. An infrastructure sector expert from one of the four big global audit companies said on condition of anonymity that higher government allocation for the sector would only work if the money is used towards capital expenditure and not for overheads, such as the salaries of bureaucrats. A look at the expenditure trend of MoRTH highways shows that the balance of government spending has clearly shifted toward capital spending over the past few years. The 2021-22 capital expenditure is estimated at ₹1.08 trillion and revenue expenditure at ₹9,871 crore. The revenue and capital expenditure ratio stood at 50:50 in 2014-15. However, in 2015-16, this ratio began changing. In 2021-22, 90% of the ministry’s spending is estimated to be on capital expenditure, up from around 88% in 2019-20. Apart from the focus on capital spending, the quality of expenditure has also improved, with most funds going to the National Highway Authority of India (NHAI), which has the mandate to build highways and expressways. Out of the ₹1.18 trillion in 2021-22, a substantial ₹57,350 crore went to NHAI, a jump of over 35% from the previous year. In the past seven years, the length of national highways has increased by more than 50%, from 91,287km (as of April 2014) to around 141,000km now despite the adverse situation due to covid restrictions and heavy and long monsoon. With higher allocation, NHAI proposes further stepping up highway construction, taking it up from 37km per day in 2020-21 to 50km in 2022-23. The pace of construction increased from 12km per day in 2014-15 to 37km per day in 2020-21 (by more than three times). A total of 4,410km national highways was constructed in 2014-15, and 13,327km in 2020-21. In the current financial year, the ministry has so far built 5,407km of national highways (as of 24 December). Apart from highways, logistics will be a big focus area of the government to bring down the country’s high logistics cost of over 15% of GDP. In this regard, NHAI is setting up multi-modal logistics parks at key places across the country. A warehousing policy is also on the anvil to help ease congestion on city roads while facilitating faster movement of goods. Download.

economy 2022-01-03 Livemint