NEW DELHI: The current cess imposed on petrol and diesel to finance road projects is likely to stay at least for the next two decades. At least that is the recommendation of the special committee formed by Prime Minister Manmohan Singh to look into the problems of the Road Transport and Highways Ministry that had impeded the construction of national highways during the past five years in particular.
Set up under the Planning Commission, the B. K.Chaturvedi Committee, with secretaries of the Finance Department and the Road Transport and Highways Department as members, has come out with a suggestion that a written undertaking should be given to the National Highways Authority of India (NHAI) assuring that the fund received from the cess imposed would be continued. The Finance Ministry will be issuing a letter of comfort assuring the availability of cess-related funds till at least 2030-31. At present the cess imposed by the Finance Ministry on petrol and diesel is Rs. 2 and Re. 1, respectively. The money so raked in is used for financing road projects across the country.
The Centre also intends to guarantee cover to the borrowing plan of the NHAI. In principle it has approved the issuance of tax empted bonds by the NHAI to raise finances, besides directing the Indian Infrastructure Finance Corporation Ltd. to set aside at least Rs. 10,000 crore for road projects from the Rs. 30,000-crore it has been permitted to borrow under the fiscal stimulus package.
It has also been decided to provide back-to-back support where necessary to the NHAI to avail itself of multilateral loans from the World Bank, the Asian Development Bank and the Japan Bank for International Cooperation (JBIC).