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Most discussions around Bharatmala Pariyojana revolve around kilometers built: 22,590 km [1] of the proposed 34,800 km have been completed so far. However, what attracts far less interest is how the National Highways Authority of India manages to fund this and how it has affected its accounts.
NHAI is not only a construction agency; for almost a decade, it has managed its balance sheet like a leveraged infrastructure company; it borrows heavily to fund its construction activities, then generates revenue through toll collections and asset sales to service its debts. Knowing this is essential to understanding how India’s highway network is funded, as opposed to just knowing how many kilometers are inaugurated every year. This article breaks down NHAI’s funding sources, including the cess that flows in automatically, the debt that it took and is now repaying, and the InvIT structure that it uses to recycle capital, using the latest available data.
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NHAI’s Debt Turnaround: From ₹3.5 Lakh Crore to Under ₹2 Lakh Crore
For many years, NHAI’s borrowing levels rose to meet the pace of construction for Bharatmala. By November 2021, its outstanding debt stood at ₹3.38 lakh crore, which peaked to an all-time high of ₹3.5 lakh crore for the year 2021-22. However, the trend was broken as rapidly as it started, as the debt fell to ₹2.76 lakh crore at the end of FY25 and even further to ₹2.35 lakh crore by December 25, 2025. By April 2026, NHAI’s outstanding debt had fallen below ₹2 lakh crore for the first time in years, reaching ₹1.96 lakh crore [2] as of April 17.
The deleveraging followed substantial loan prepayments, including ₹86,000 crore of liabilities prepaid earlier, of which ₹50,000 crore comprised loans from the National Small Savings Fund (NSSF). The Government of India has not permitted NHAI to raise funds since FY 2023-24, which is why debt reduction started. The Ministry of Road Transport and Highways’ budgetary allocation rose from about ₹31,130 crore in 2013–14 to ₹3 lakh crore in 2024–25. Within this, the National Highways Authority of India (NHAI) received ₹170,266 crore in the 2025–26 revised estimate, with its allocation rising to ₹187,293 crore in Budget 2026–27 [3].
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Where Does Bharatmala’s Money Come From?
Flexible financing characterizes Bharatmala, which combines many funding sources, each with distinct features:
- Central Road and Infrastructure Fund (CRIF) cess: A fixed levy imposed on each liter of petrol and diesel sold in the country; automatically goes into road-building funds.
- Toll revenues: Funds from operational highways used to service the debt and maintenance.
- Budgetary support: Direct Union Budget allocations, NHAI’s primary funding source since the start of FY23.
- Market borrowings: Bonds and loans issued by NHAI, though market borrowings by NHAI have mostly come to a halt since 2022-23.
- Multilateral funding: Funding from institutions like the World Bank, JICA, ADB, etc. These institutions have created more than 2540 km of highways through externally aided projects.
- Asset monetization (TOT and InvIT): Selling operating rights on completed highways to private investors, discussed in detail below.
- Private sector investment via HAM: Developer-funded construction under the Hybrid Annuity Model.
The Ministry of Road Transport and Highways manages these flows through specific funds such as the Central Road and Infrastructure Fund, the Monetization of National Highways Fund, the National Investment Fund, and the Permanent Bridge Fees Fund, which are financed by the cess, tolls, monetization, and disinvestment receipts (money raised by the government by selling its stakes in PSUs).
NHAI’s Two Monetisation Routes: TOT and Its Own InvIT (NHIT)
NHAI utilizes two separate methods to recycle capital from completed highways, which should not be confused. The first of these methods is the Toll-Operate-Transfer (TOT) model, where NHAI sells the operating rights of a bundle of highway sections to a private entity for a one-time payment. The second is NHAI’s InvIT, National Highways Infra Trust (NHIT), which buys operating road assets, and NHAI receives a lump sum while distributing toll income to the unit holders over time.
NHAI-wide monetization (TOT + NHIT combined):
| Metric | Figure |
| Total monetisation via TOT + InvIT, up to FY25 | ₹92,633 crore |
| TOT’s share of FY19–FY25 monetisation | 53% |
| FY25 monetisation | ₹24,399 crore |
| FY26 budgeted target | ₹30,000 crore |
| FY26 monetisation achieved by 30 March 2026 | ₹28,307 crore |
Sources: PIB, ICRA
NHIT specifically:
| Metric | Figure |
| NHIT established / registered as InvIT | 19 Oct 2020 / 28 Oct 2020 |
| Total raised across four rounds | ₹46,450 crore |
| Unit capital raised | ₹23,051 crore |
| Record single round — Round 4 (March 2025) | ₹18,380 crore |
| Portfolio after Round 4 | 2,345 km / 26 operating toll roads / 12 states |
| Concession periods | 20–30 years |
Sources: PIB, CARE Ratings
The fourth round of NHIT raised ₹8,340 crores in unit capital and ₹10,040 crores in debt, bringing the cumulative realized value of the four rounds to over ₹46,000 crores, with the Employees’ Provident Fund Organisation (EPFO) making its first InvIT investment of ₹2,035 crores in this round [4]. Notably, the funds raised through the InvIT route are used exclusively to service debt, meaning NHIT isn’t funding new construction directly; it’s a mechanism to convert completed highways back into cash that pays down NHAI’s borrowings.
HAM: The Private Capital Running Alongside NHAI’s Debt
A meaningful share of Bharatmala’s construction doesn’t touch NHAI’s balance sheet directly at all. It runs through the Hybrid Annuity Model (HAM). Under HAM, the government contributes 40% of the project cost during construction, while the private developer finances the remaining 60% through a mix of equity and bank debt, later recovered via fixed annuity payments from NHAI over the operations period, paid to the concessionaire (the private company that built and now operates the highway under the concession agreement).
This shifts traffic and revenue risk fully onto the government, because the concessionaire is paid regardless of how many vehicles actually use the highway, while construction risk stays with the private developer, easing pressure on NHAI’s own borrowing needs during the build phase.
What NHAI’s Financing Shift Means for India’s Infrastructure
NHAI’s pivot from heavier reliance on budgetary support and monetization to being lighter on fresh market debt marks a real change in how Bharatmala gets financed going forward. It reduces NHAI’s own leverage risk, but it also means the “cost” of highway building is now more visible in the Union Budget’s numbers rather than put away as an off-balance-sheet liability. For anyone tracking India’s public finances or NHAI-linked bonds, this shift from debt-funded to monetization-and-budget-funded construction is the story to watch over the next few years.
Conclusion: NHAI’s Financing Playbook Going Forward
NHAI’s story over the past few years isn’t really about how many kilometres get built; it’s about how the bill gets paid. The authority has moved from an aggressive, debt-fueled construction model to one leaning more on budgetary support, cess collections, and monetization through TOT and its own InvIT.
That’s made NHAI’s balance sheet noticeably healthier, but it’s also shifted the financing burden more visibly onto the Union Budget itself. As Bharatmala Phase-I nears completion and future phases take shape, this balance-sheet discipline may be the more telling indicator of whether India’s highway-building model is actually sustainable.
NHAI Funds Bharatmala Frequently Asked Questions
Bharatmala Phase-I was designed to be funded through a mix of Central Road and Infrastructure Fund (CRIF) cess, budgetary support, toll revenues, highway monetization, NHAI borrowings, and private-sector investment.
NHAI services its debt through sources including toll revenues, asset monetization, and government-supported funding flows.
As of April 2026, NHAI’s outstanding debt stood at around ₹1.96 lakh crore, down from a peak of roughly ₹3.5 lakh crore in 2021-22.
National Highways Infra Trust is NHAI’s own SEBI-registered InvIT; TOT is a separate route where NHAI sells operating rights directly to a private investor. Both are monetization tools, but they work through different structures.
The Central Road and Infrastructure Fund is supported by a cess on petrol and diesel. A portion allocated to the highway sector is transferred to support infrastructure development, including NHAI’s activities.
Sources
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2272639&lang=1®=48&
- https://www.financialexpress.com/business/infrastructure-nhai-debt-falls-belownbsprs-2-lakh-crore-4220070/
- https://www.indiabudget.gov.in/doc/Budget_at_Glance/budget_at_a_glance.pdf
- https://www.pib.gov.in/PressReleaseIframePage.aspx/pib.gov.in/Pressreleaseshare.aspx?PRID=2115309&lang=2®=48&
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