Budget 2026: Highways outlay may rise marginally to Rs 2.90 lakh crore

The government may allocate around Rs 2.90 lakh crore for the highways sector in Union Budget 2026, government sources told Business Today. Highways sector is likely to get a 2–3 per cent increase over last year’s allocation, the source said reflecting a cautious approach amid slower fund utilisation.

The Ministry of Road Transport and Highways was allocated Rs 2.87 lakh crore in the previous Union Budget, and sources indicated that subdued spending in FY25 is likely to limit the scope for a sharp rise in budgetary support for the sector this year.

Instead of significantly raising allocations, the government is expected to place greater emphasis on mobilising private capital to fund highway expansion and project execution.

As part of this strategy, the road transport ministry has identified a 13,400-km project pipeline to be developed under the public-private partnership (PPP) model, involving an estimated investment of Rs 8.3 lakh crore over the next three years, sources said.

The upcoming Budget may also announce policy and procedural measures aimed at speeding up clearances for projects under Build-Operate-Transfer (BoT), Toll-Operate-Transfer (ToT) and PPP frameworks, with the objective of improving execution timelines and attracting long-term investors.

In line with the government’s asset monetisation push, NHAI’s Rajmaarg InvIT is likely to be listed in the current financial year, providing an additional avenue to raise funds without increasing direct budgetary outgo.