National highway construction declined to 2,369 km during April–September 2026, while project awards fell 62.3%, raising concerns over the pace of infrastructure development.
Highlights
- National highway construction declined 18.6% to 2,369 km in H1 FY27.
- Highway project awards dropped 62.3% to 2,236 km.
- Government aims to construct 10,000 km of highways in FY27.
- Only 7,184 km of highway projects were awarded during FY26.
- Cabinet approved 23 highway projects worth ₹2.54 lakh crore between June 2024 and April 2026.
India’s Highway Construction Slows 19% in H1 FY27, Raising Concerns Over 10,000-Km Target
India’s national highway construction activity slowed sharply during the first half of the financial year 2026-27, with the pace of road building declining by nearly 19% compared with the corresponding period last year.
According to government data cited in a Financial Express report, national highway construction fell 18.6% year-on-year to 2,369 kilometres during April–September 2026.
The slowdown reflects continuing challenges in project execution, land acquisition and regulatory clearances.
Highway Project Awards Decline 62.3%
The pace of awarding new highway projects has also weakened significantly.
During April–September 2026, highway project awards declined 62.3% year-on-year to 2,236 km.
The sharp fall in new contracts could affect construction activity in the coming quarters, as project awards determine the future pipeline of road development.
However, the government expects activity to improve during the second half of the financial year.
Government Targets 10,000 Km of Construction
For FY27, the Ministry of Road Transport and Highways has set a highway construction target of 10,000 km.
The target follows a weaker FY26 performance, when highway project awards stood at 7,184 km.
With only 2,369 km constructed during the first six months of FY27, the government will need a substantial acceleration in execution to achieve its annual target.
Officials expect faster progress as projects move through approval and implementation stages.
₹2.54 Lakh Crore Highway Projects Approved
Between June 2024 and April 2026, the Union Cabinet approved 23 major highway projects involving a combined investment of ₹2.54 lakh crore.
However, construction activity has remained below expectations due to execution challenges.
The government has introduced an eight-point approach to improve project implementation, including resolving land acquisition issues and securing necessary clearances before awarding contracts.
These measures are intended to reduce delays during construction and improve the completion rate of highway projects.
Capital Expenditure Rises 5.8%
Despite slower highway construction, capital spending on the sector has increased.
According to data from the Ministry of Statistics and Programme Implementation, capital expenditure rose 5.8% year-on-year to ₹1.58 lakh crore during the first six months of FY27.
The Ministry of Road Transport and Highways has a capital expenditure target of ₹2.94 lakh crore for the current financial year.
Meanwhile, spending on hybrid annuity model (HAM) highway projects has also increased.
Electronic Toll Collections Show Growth
Electronic toll collections continued to grow, indicating sustained traffic movement across the national highway network.
Collections increased 14.5% year-on-year to ₹36,994 crore during April–September 2026.
However, the slowdown in highway construction and project awards remains a major concern for the infrastructure sector.
The government will need to accelerate approvals, resolve execution bottlenecks and speed up construction during the remaining six months of FY27 to move closer to its 10,000-km target.
