This study explores the potential of using alkali activated slag (GGBS) and sugarcane bagasse ash (SCBA) for stabilizing lateritic soil subgrades. Through a series of compaction tests, the optimal dry density was achieved with varying dosages of SCBA while maintaining a constant slag dosage of 10% by weight of the soil. The sodium hydroxide flakes (NaOH) and liquid sodium silicate (Na2SiO3) were used to produce the alkali-activator aqueous solution. The Unconfined compressive strength (UCS) and California Bearing Ratio (CBR) tests were conducted on both unstabilized and stabilized soil mixtures. The experimental investigations indicate that the strength of lateritic subgrade soil increases with the inclusion of SCBA up to a certain level (i.e., 10%), beyond which it reduces, under a constant dosage of slag. This study also proposes a pavement design using stabilized soil based on the Indian Roads Congress (IRC) guidelines for low-volume pavements, demonstrating significant reductions in total pavement thickness. The microstructural analysis is performed to understand the hardening performance upon Alkali-Activated stabilization. Co-relationships between the strength parameters (UCS and CBR) were established, allowing for the development of a simple linear regression model to understand the relationship between the strength parameters of alkali-activator stabilized lateritic soil.