A little less than Rs 1 out of every Rs 5 spent by the National Highways Authority of India (NHAI) in 2022-23 goes towards debt servicing, a parliamentary standing committee report, presented to the Rajya Sabha earlier this month, revealed. NHAI had around Rs 3.4-trillion debt as on November 2021.

According to the estimates of the ministry of road transport and highways (MoRTH) presented to the committee, headed by TG Venkatesh, NHAI has to spend Rs 31,049 crore on servicing debt in 2022-23 and Rs 31,735 crore in 2023-24. The debt servicing cost would fall to Rs 30,601 crore in 2024-25 before rising again to Rs 37,732 crore in 2025-26. In 2021-22, NHAI is likely to spend Rs 40,337 crore on debt servicing. Both in FY21 and FY22, NHAI borrowed Rs 65,000 crore each.

The decline in debt servicing obligation in 2022-23 over the current fiscal is also because the government has nullified the authority’s need to resort to borrowing in 2022-23 by providing all Rs 1.41-trillion allocation to it through budgetary outlay.

The committee has asked MoRTH to apprise it of the “reason for increase in the (debt servicing) amount that is estimated by the ministry to be spent on servicing NHAI debts during FY25-26”.

In its written reply to the committee, MoRTH has projected NHAI’s FY23 expenditure at Rs 1.72 trillion of which about Rs 1.41 trillion is expected to be met from the budgetary outlay and the balance Rs 30,000-crore fund requirement is to be met by raising funds through other sources like special purpose vehicle (SPV), infrastructure investment trust (InvIT), etc.

NHAI will use the fund for meeting project expenses, including costs for pre-construction activities, debt servicing repayment obligations, etc, the committee was informed.

NHAI’s cumulative debt kept on piling to stand at Rs 44,567 crore at the end of 2015-16 and rose to Rs 77,742 crore in 2016-17, Rs 1.22 trillion in 2017-18, Rs 1.79 trillion in 2018-19. At the end of FY21, NHAI had Rs 3.17-trillion debt.

The rise in the debt level is mainly because of the continuous spike in highway construction. From 2,588 km in 2016-17, NHAI’s construction rose to 4,218 km highway in 2020-21.