The ministry of surface transport will introduce a Bill in Parliament to create a dedicated road fund with proceeds from the cess on diesel and petrol for development of national highways, state roads and rural roads.
Minister of state for surface transport Debendra Pradhan yesterday told the Lok Sabha that the 1977 and 1988 resolutions governing the existing Central Road Fund would be withdrawn.
The surface transport ministry will send the draft cess Bill to the law ministry before placing it in Parliament. The Cabinet has already cleared the proposal of creation of a dedicated road fund by levying cess on petrol and diesel.
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However, Parliamentary approval is needed to transfer the cess from the Consolidated Fund to the dedicated road fund under the surface transport ministry.
Pradhan said 50 per cent of the Re 1 per litre cess on diesel would be spent on the development of rural roads. And 15 per cent of the cess on diesel and 30 per cent of the cess on petrol would be used for the development of state roads.
Pradhan further said the remaining 35 per cent of the cess on diesel and 70 per cent cess on petrol would be used for the development of national highways and construction of rail-over-bridges and safety work on unmanned level crossings.
Pradhan also said the ministry had initiated steps for formulating a national shipping policy and included the following proposals:
l Grant of export industry status to the shipping industry
l Restoration of Section 33 AC of the Income Tax Act
l Enhancement of depreciation from 20 per cent to 40 per cent
l Tax relief to Indian seafarers
l Declare coastal shipping as an infrastructure industry
The government also granted a mini-ratna status to the Shipping Corporation of India in February to award an enhanced delegation of financial power.
Pradhan said the government had allowed SCI to enter into joint venture with Mitsui OSK, Japan, and Atlantic Commercial Finance Company, an Enron affiliate, for transportation of liquefied natural gas to Dhabol Power Company.
Also, initiative has been taken to formulate a LNG Transportation Policy, favouring transportation of LNG by Indian flag vessels.