The Centre has decided to fix the states' share in the central road fund in direct proportion to the fuel consumption, paving the way for a lop-sided development of roads in states. The Central Road Fund Bill to move the cess revenue from the consolidated fund to the dedicated road fund is unlikely to be placed in the Budget session of the Parliament.
Rs 990 crore of the cess revenue has been earmarked in the current financial year for the development of state roads. Road development in poorer states with lower fuel consumption will take a backseat as larger share of the allocated fund will go to richer states with higher fuel consumption.
However, road transport and highways secretary Ashok Joshi told Business Standard the criteria of fund allocation on the basis of fuel consumption was an old one and has been practised earlier. We have decided to stick to the old formula as the road fund is collected by levying a cess on diesel, Joshi said. However, it can also be seen from the point of view that road development in poorer states would be affected.
Joshi said the Central Road Fund Bill for creating the dedicated road fund under the ministry of surface transport was unlikely to be placed in the Budget session. The Bill will be introduced to move the cess revenue from the consolidated fund to the central road fund under ministry of surface transport. The Bill would be placed in the winter session, Joshi said. At present, the fund is released as part of the budgetary allocation.
A Re 1 cess on per litre of diesel will generate a revenue of Rs 5,000 crore this fiscal. Of this, the NHDP has been allocated Rs 2,010 crore, development of state roads will get Rs 990 crore and the rest will be used for the development and maintenance of the rural roads.
NHAI official said distribution of funds on the basis of fuel consumption raised the question of social equity as less prosperous states would get lower share and road development and maintenance in these states would be hit.
