Budget 2026 flags big highway ambitions, but awards and construction trail targets in FY26

Even as Union Budget 2026 steps up allocations for roads and highways, official data points to slower execution on the ground in the current financial year, highlighting a widening gap between ambition and delivery.

According to the Ministry of Road Transport and Highways (MoRTH), only 5,283 km of national highways had been constructed as of January 20, 2026, against a full-year target of 10,000 km for FY26. Project awards have also lagged sharply, with just 2,534 km awarded so far this year compared to the same 10,000 km annual target.

The slowdown contrasts with the government’s longer-term narrative of rapid expansion. Over the past decade, the pace of highway construction has risen to an average of 29.2 km per day, up from 11.7 km per day in 2013-14, while average annual construction during 2014-25 more than doubled compared to the previous decade. However, the FY26 numbers suggest momentum has softened, at least in the current cycle.

A similar pattern is visible in project awards. While average annual awards during 2014-25 stood at around 10,700 km nearly three times the pace seen between 2004 and 2014, FY26 awards to date remain well below trend, raising questions over project pipeline visibility for contractors and developers.

Flagship highway programme Bharatmala Pariyojana also continues to see incomplete stretches. Of the 26,425 km awarded under the programme, about 21,785 km have been completed, leaving over 4,600 km still pending, despite multiple years of accelerated spending.

The Budget documents also show that capital expenditure during FY26 has undershot targets so far. Against a capex goal of ₹3.06 lakh crore for 2025-26 (including private investment), actual spending stood at around ₹2.13 lakh crore, pointing to execution bottlenecks amid land acquisition challenges, financing constraints and slower project clearances in select stretches.

This comes even as Budget 2026-27 raises MoRTH’s allocation to a record ₹3.09 lakh crore and introduces new measures such as an Infrastructure Risk Guarantee Fund to improve lender confidence. While the higher outlay signals continued policy priority for roads, analysts note that timely awards, faster construction and smoother financial closures will be critical to translating allocations into physical assets.