Union Road Transport and Highways Minister Nitin Gadkari has announced a transformative move in India’s infrastructure sector: ₹25,000 crore worth of highway fund units will be made available to retail investors through the National Highways Authority of India’s (NHAI) infrastructure investment trust (InvIT) public issue this financial year. This allocation, representing 30–40% of the total InvIT issue, is designed to attract small investors and democratize participation in the nation’s ambitious road-building program.
NHAI’s InvITs are financial instruments that allow investors to buy units backed by completed, toll-generating highway projects. Retail investors who purchase these units can earn regular income from toll collections, making infrastructure investment accessible beyond large institutions. The move comes as the government targets the construction of 10,000 km of highways and the monetization of ₹50,000 crore worth of road assets this fiscal year.
The push for retail participation follows the success of previous InvIT rounds. In October 2022, NHAI’s first InvIT issue of non-convertible debentures raised ₹1,500 crore, offering a 7.9% coupon with an annual assured return of 8.05% and reserving 25% for retail investors. The new allocation marks a significant scale-up in public engagement.
In a parallel reform, Gadkari has announced the end of the ‘lowest bidder’ (L1) rule for awarding contracts to prepare detailed project reports (DPRs) for highways. Traditionally, contracts for DPRs were awarded solely based on the lowest bid, a practice often blamed for poor-quality project planning, substandard construction, and increased road accidents. Now, technical expertise, sector experience, and proven capability will be prioritized in the selection process, though competitive pricing will still be maintained.
The reforms are also significant for India’s strategic road-building efforts, especially in border regions. The National Highways & Infrastructure Development Corporation Ltd (NHIDCL), responsible for constructing roads in sensitive areas like Arunachal Pradesh, Meghalaya, and Jammu & Kashmir, will soon have a permanent cadre of personnel. The initial recruitment will include 1,000 people from the respective states, strengthening local employment and expertise.
This infrastructure push is set against the backdrop of heightened focus on border connectivity following recent military tensions. Projects in the Northeast and Jammu & Kashmir, including high-speed corridors and tunnel-based roadways, are underway to bolster national security and economic integration.
