The current cess on petrol and diesel to finance road projects in the country is likely to stay at least for the next two decades.
This 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 up with the 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.
Currently the cess imposed by the Finance Ministry on petrol is Rs. 2 and Re. 1 on diesel.
The Centre also intends to guarantee cover to the borrowing plan of the NHAI. In principle it has approved the issuance of tax exempted bonds by the NHAI to raise finances, besides directing the Indian Infrastructure Finance Corporation Limited to earmark 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.
