Budget 2026: Roads ministry gets record ₹3.09 lakh crore as govt doubles down on infra push 

The government has allocated a record ₹3.09 lakh crore to the roads and highways sector in Union Budget 2026-27, underscoring infrastructure’s central role in driving economic growth. Of this, capital expenditure alone stands at ₹2.94 lakh crore, marking roughly a 9% rise over last year’s Budget Estimates and making it the highest-ever allocation for the Ministry of Road Transport and Highways (MoRTH).

The highways push comes alongside a broader public investment drive, with overall central capital expenditure pegged at ₹12.2 lakh crore for FY27, signalling the government’s intent to sustain momentum in construction, logistics and allied sectors.

A key structural announcement this year is the proposed Infrastructure Risk Guarantee Fund, aimed at improving lender confidence during the construction phase of large projects. The fund will provide prudently calibrated partial credit guarantees, a move expected to help crowd in private capital and ease financing constraints in long-gestation infrastructure projects.

To strengthen domestic manufacturing linked to infrastructure, the Budget also proposes a new Scheme for Enhancement of Construction and Infrastructure Equipment (CIE). The initiative will focus on building local capabilities in high-value and technologically advanced equipment ranging from lifts and firefighting systems to tunnel-boring machines used in metros and high-altitude roads aligning the highways push with the government’s broader Make-in-India objectives.

Funding for the sector will continue to rely on a mix of budgetary support and asset monetisation. For FY27, MoRTH has set a ₹30,000 crore monetisation target, split evenly between toll-operate-transfer (ToT) bundles and InvITs, reinforcing the role of alternative financing in sustaining highway expansion.

The Budget documents highlight the scale-up achieved over the past decade, with the national highways network expanding to over 1.46 lakh km, a sharp increase from 2014 levels, and a significant rise in four-lane and high-speed corridors. However, the current fiscal year has seen slower on-ground progress, with highway construction and project awards both trailing annual targets so far underscoring execution as a key monitorable even as allocations rise.