Budget may levy extra cess on petrol, diesel

BS Economy Bureau

The government is considering levying an additional cess of 30 paise per litre on petrol and diesel in this year's Budget to fund the National Highway Development Project.

The proposal is expected to net Rs 15 billion annually. Senior officials from the transport ministry, the Planning Commission and the finance ministry are meeting tomorrow to thrash out the details of the proposal. The meeting will be chaired by Planning Commission member NK Singh.

The need for additional cess has risen as the ambitious Rs 580-billion project has not been able to tie up more than Rs 140 billion, according to senior officials. They added that any delay in meeting this shortfall can push back the December 2003 target for completing the project. However, tomorrow's meeting is only a preliminary one, sources said.

The government has already levied a Re 1 cess on both petrol and diesel which yields around Rs 59 billion annually. Of this, Rs 25 billion is used for the rural roads programme executed by the ministry of rural development, while the rest goes to meet the expenditure on the NHDP, and for constructing the state roads and the rail overbridges.

Though the corpus from the existing cess of Re 1 is expanding ever year, sources said the lack of adequate private support for the over 14,500 km road project has queered the pitch. The NHDP aims to make the highways connecting the four metros four-laned by the end of 2003 (Golden Quadrilateral Project) and then provide an additional North-South-East-West corridor by 2007.

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