India's national highways build-out and the NHAI model

The scale of the build-out

India’s national highway network reached roughly 146,000 km by August 2025, according to figures cited by the Ministry of Road Transport and Highways and reported by Swarajya, which put the total at 146,342 km after 10,660 km were added in FY25. The ministry has repeatedly framed this as an expansion of about 60% from the roughly 91,287 km recorded in 2014. National highways remain a small fraction of India’s total road length but carry a disproportionate share of freight and long-distance traffic, which is why the ministry’s capital budget is one of the largest single-department allocations in the Union budget.

The pace of construction, however, has cooled. Business Standard, citing a written reply by the current Minister of Road Transport and Highways to the Rajya Sabha, reported that the average pace fell to about 29 km/day in FY25, down from 34 km/day in FY24, with the highest-ever pace of 37 km/day recorded in FY21; total highways built dropped to 10,660 km in FY25 from 12,349 km in FY24. The Tribune, citing a CareEdge Ratings report, noted the rate stood near 27 km/day in FY26. The ministry and analysts attribute the slowdown to factors including a sharp fall in fresh project awards — which the CareEdge report put at about 4,874 km in FY25 — and to land-acquisition and financing constraints; these attributions are contested in emphasis rather than in the underlying numbers.

The NHAI delivery model

The build-out runs through the National Highways Authority of India (NHAI), the statutory body operational since 1995 that develops and finances most of the network on behalf of the ministry. NHAI awards highways under three principal contracting modes: Engineering-Procurement-Construction (EPC), where the government funds the work; Build-Operate-Transfer (BOT), where a private concessionaire finances construction and recovers cost through tolls; and the Hybrid Annuity Model (HAM), which splits capital between the government and the developer and pays the developer annuities. The mix among these models shifts year to year and is a recurring subject of industry commentary, because it determines how much construction risk and financing sits with the state versus private developers.

Much of the recent network was awarded under Bharatmala Pariyojana Phase I, the programme the Union Cabinet approved in 2017 targeting about 34,800 km at a cost of about Rs 5.35 lakh crore. The Comptroller and Auditor General, in an August 2023 audit of Phase I, recorded that of the 34,800 km approved, about 26,425 km had been awarded and 18,180 km completed, and flagged cost escalation — a sanctioned civil cost of about Rs 23.89 crore per km against the CCEA-approved Rs 13.98 crore per km — along with scope changes; PRS Legislative Research has summarised the same programme’s implementation as running behind its original timeline. The programme’s flagship greenfield corridors include the Delhi-Mumbai Expressway, the Delhi-Amritsar-Katra Expressway and the Bengaluru-Chennai Expressway.

Asset recycling: ToT bundles and the NHIT InvIT

A defining feature of the NHAI model is asset recycling — selling the future toll rights of completed, revenue-generating highways to investors and channelling the proceeds back into new construction and debt repayment. NHAI does this through two main channels. Under Toll-Operate-Transfer (ToT), it auctions bundles of operational highways to concessionaires for a lump-sum upfront payment and a fixed concession period; in FY26 it awarded ToT Bundle-18 — the 74.5 km Chandikhole-Bhadrak stretch of NH-16 in Odisha — to IRB for Rs 3,087 crore over a 20-year concession, according to NHAI. The second channel is the National Highways Infra Trust (NHIT), an Infrastructure Investment Trust NHAI sponsors that holds highway assets and raises capital from institutional and retail investors; NHIT’s Round-5 monetisation of over 310 km was awarded to NHIT Western Projects for a concession fee of about Rs 6,367 crore for 20 years.

For FY26, NHAI identified 24 road assets covering about 1,472 km for monetisation via ToT and InvIT against a target of roughly Rs 30,000 crore, of which the Centre sanctioned Rs 12,357 crore, according to Swarajya. By the close of FY26, NHAI reported realising about Rs 28,307 crore through a mix of ToT, public and private InvIT and securitisation, according to Business Standard. The strategic weight behind monetisation grew in the FY26 budget: as Business Standard reported, the Union Budget for 2025-26 made no provision for fresh NHAI borrowing, and proceeds from monetisation are directed toward reducing the authority’s accumulated debt. The FY26 allocation to the ministry was about Rs 2.87 lakh crore, of which the NHAI share was about Rs 1.88 lakh crore, per PRS and Business Standard.

Tolling: FASTag, the Annual Pass and the GNSS shift

How the network earns revenue is changing. NHAI collected Rs 72,931 crore in toll revenue in FY25, per figures cited by Business Standard. On 15 August 2025 the ministry launched a FASTag Annual Pass for private vehicles — priced around Rs 3,000 (revised to Rs 3,075 for FY 2026-27, effective 1 April 2026) and valid for one year or 200 toll crossings, whichever comes first. Because the pass reduces per-trip toll receipts, NHAI put in place a transitional mechanism to compensate toll operators for revenue shortfall for an initial three-month window. CRISIL Ratings, in a June 2025 assessment of 40 operational toll projects, estimated the pass could lower toll operators’ revenues by 4-8%; this is an attributed ratings estimate, not a ministry figure.

In parallel, the ministry is moving toward barrier-free, satellite-based tolling. Coverage of the ministry’s plans describes a Global Navigation Satellite System (GNSS) approach using NavIC/GAGAN and GPS to charge tolls by exact distance travelled, alongside Multi-Lane Free Flow (MLFF) tolling that uses overhead gantries, RFID readers and automatic number-plate recognition to charge vehicles without stopping. The ministry has been phasing out cash lanes at national highway plazas. The timing and sequencing of the private-vehicle GNSS rollout are described differently across sources and remain in flux.

What is contested

The core numbers — network length, annual kilometres built, toll revenue, budget allocation — are drawn from ministry statements and budget documents and are broadly consistent across sources. What is contested is interpretation: whether the slower construction pace reflects a maturing network with harder remaining stretches or execution and financing bottlenecks; whether the heavy reliance on asset monetisation is a durable financing model or a way of front-loading revenue against future toll streams; and how much the FASTag Annual Pass and GNSS transition dent NHAI’s toll base. This brief characterises those positions and attributes them; it does not adjudicate among them or project outcomes.

Who owns this topic (and why we’re here)

Search results for India’s highways and the NHAI model are dominated by two kinds of pages. The first is UPSC and exam-prep explainers — Drishti IAS, Vajiram & Ravi, Testbook, BYJU’S, Legacy IAS — which reliably list the NHAI Act, Bharatmala components and contracting models but freeze at the last syllabus revision and rarely carry current budget, monetisation or tolling figures. The second is trade and ratings coverage that tracks individual ToT bundles or InvIT rounds without stitching them into the whole financing model. IndiaStand’s advantage is structural: a single maintained dossier on the institution plus a living topic brief that ties the network’s physical build-out, the EPC/BOT/HAM delivery mix, ToT and NHIT asset recycling, the budget’s no-borrowing stance and the FASTag-to-GNSS tolling shift into one attributed, dated state of play — updated as the numbers move, not as a syllabus refreshes.

Maintained topic brief. Analysis by IndiaStand — it characterises the state of play and the range of positions actually held, attributes each claim, and makes no forecast and no recommendation.