Fuel cess may fetch Rs 9,000crore

Govt expects mop-up to jump 50% this fiscal

The government expects to collect nearly Rs 9,000 crore this fiscal from the cess on petrol and diesel, over 50 per cent more than last year. The total collection stood at Rs 5,900 crore in 2002-03.

The increase was largely on account of the 50 paise a litre hike in the cess on petrol and diesel, which was being used to partly finance the ongoing Rs 58,000-crore National Highways Development Project (NHDP), government officials said.

The collection from the cess on the automobile fuels had touched Rs 2,874 crore in August 2003, officials said. The cess had been increased from Re 1 a litre to Rs 1.50 a litre in the Budget for 2003-04.

Of the total money accruing from the levy on diesel, 50 per cent goes into the development of rural roads.

The balance, along with the entire cess on petrol, is spent on the development of national highways under the NHDP (57.5 per cent), the construction of railway crossings and road overbridges (12.5 per cent), and given to the states for the upgradation of their roads (30 per cent). The 50 paise additional cess on diesel, added this fiscal, went entirely to the NHDP.

Even though the government has till November released around Rs 279 crore from the Central Road Fund (CRF) to the states for road upgradation, they have been lax in utilising this money.

Of the 30 proposals sent by the states till November, 10 are pending as the states concerned have failed to produce utilisation certificates for the previous disbursements to them from the CRF.

"The slow pace of utilisation of money accruing to the states from the fuel cess for the upgradation of their roads is worrying," an official in the ministry of road transport and highways said.

Andhra Pradesh, Bihar, Jammu and Kashmir, Karnataka and Punjab are among the states that have failed to produce utilisation certificates.

According to the guidelines, when money collected from the cess on the automobile fuels is used to upgrade state roads, the work has to be completed within 24 months of the grant of funds. The states have to send detailed estimates, following which the ministry sanctions the projects.

Funding wider roads

• Increase on account of 50 paise a litre hike on petrol and diesel
• Money used to part-finance the NHDP
• Collections of Rs 2,874 crore till August this fiscal
• Rs 279 crore from the fund released to states till November 2003