More funds sought for rural roads plan

The rural development ministry has urged the Prime Minister's Office to expedite the release of additional funds, raised through a 50 paise cess on every litre of diesel sold, for funding the Pradhan Mantri Gram Sadak Yojana (PMGSY).

It has also urged the National Bank for Agriculture and Rural Development (NABARD) to resume the funding of the rural roads programme under the Rural Infrastructure Development Fund.

The ministry has informed the PMO that the additional 50 paise cess levied over and above the Rs 1 cess in Budget 2003-04, has not been provided to it as yet.

The ministry has made the observation ahead of a review meeting between Prime Minister Manmohan Singh and chief ministers tomorrow on the status of the anti-poverty programmes.

The note says, "It is necessary to obtain additional resources for the programme as the available resources are not sufficient to meet the initially assessed requirement of Rs 60,000 crore for the programme." It adds, "To accelerate the process of augmenting an modernising rural roads, this committed amount needs to be provided."

The cess will yield about Rs 1,300 crore per annum for the programme. This will be in addition to the 50 per cent share of the Re 1 cess on every litre of high-speed diesel sold, that the ministry has been receiving. According to the Budget 2003-04 documents, the latter amounts to approximately Rs 2,148 crore per annum.

The documents say in the revised estimates for 2003-04 the ministry had received Rs 2,090 crore, while the interim Budget for 2004-05 had set aside Rs 2,219 crore for the road plan. An additional Rs 320 crore is also expected to be obtained as external assistance for the project in the current fiscal.

The release of the additional cess is important for the rural development ministry as it has not found any other significant source of revenue to finance the rural roads plan.

However, finance ministry officials said there had been no delay in the release of the diesel cess. They said the actual receipts of the cess took some time, and the funds would be released promptly.

They, however, said there were question marks on the way the programme has been handled by the ministry so far, as there were no reports on the actual progress in the implementation of the project.

The PMGSY was launched in December 2000, to provide all-weather roads to rural habitations across the country, with a population of at least 500 people. The deadline set for completing the scheme was 2006-07.

One for the road

• The ministry receives nearly Rs 2,148 crore per annum from the Re 1 cess on high speed diesel levied in Budget 2001-02
• The 50 paise cess will yield around Rs 1,300 cr per year
• The initially assessed requirement for the rural roads plan is Rs 60,000 crore