Centre likely to slow down highway capex in Budget 2023

The Union finance ministry is likely to impose speed breakers on the capital expenditure allocation to the Ministry of Road Transport & Highways for 2023-24 in the upcoming budget.

While the total gross budgetary support to the ministry is likely to remain flat, allocation towards capital expenditure for highways may see a marginal rise in comparison to the previous fiscal, and the jump in capital allocation year-on-year witnessed in the last couple of years to the ministry may not be seen this time, sources pointed out.

Sources pointed out that the highway ministry is likely to get gross budgetary support to the tune of ₹2.10 lakh crore in the upcoming budget for capital and revenue expenditure in 2023-24. This is almost flat in comparison to the gross budgetary support of ₹1,99,107 crore received by the ministry for the current financial year.

That leaves scope of very marginal hike on the highway capital expenditure front in the next year, bucking the trend of the previous fiscals when the capital outlay in the sector year-on-year witnessed a hike of up to 75%. "With the GBS expected at around ₹2.10 lakh crore in FY24, the capital outlay may be at around ₹2 lakh crore for the fiscal as the average revenue expenditure of the highway ministry is to the tune of ₹10,000 crore," said a ministry source.

This essentially means that there might only be a minor increase in the capital spending of the highway ministry, which in the last couple of years has seen mega allocation and has been a major sector for the infrastructure spending for the government.

It may be noted that in the current financial year, infrastructure spending support to the highway ministry was ₹1,87,744 crore. With the GBS at ₹2.10 lakh crore expected in the next fiscal, and after accounting for revenue spend of ₹10,000 crore, capital outlay may remain at about ₹2 lakh crore, up by a mere ₹12,250 crore, or 6.5% over current fiscal.

That, if it happens, would indicate a huge contrast and trend reversal over the last couple of years in which allocation to the highway ministry has seen mega jumps year on year. In FY23, allocation for capital expenditure to the highways at ₹187,744 crore was up a whopping 73% from allocation of ₹1,08,230 crore in FY22. Also, the allocation in FY22 was up 32% over ₹81,974 crore in FY21. Ministry officials are tight-lipped on the likely nixing of the budget allocated in the past.

It may, however, be noted that the highway ministry has got the lion's share in the central capital expenditure in the last couple of years. Allocation to the tune of ₹26,63,362 crore has been done by the Centre on capital expenditure in the past five years. Of this, the highway ministry accounts for ₹5,63,622 crore.