The additional cess is proposed to be used for financing new road projects like phase 3 and 4 of the National Highway Development Programme, which would entail an investment of Rs 1,70,000 crore (Rs 1700 billion) over seven years.

Run-up to the Budget: Complete Coverage

An announcement regarding the expansion of the scheme is expected in the Budget. In addition, the budgetary allocation for highways is likely to be enhanced. The Centre is also keen on appointing a regulator to set the toll for the highways.

Besides, the need for the National Highway Authority of India to approach the Public Investment Board for all clearances will no longer be required. The authority will, however, be required to seek clearance from the Cabinet Committee on Economic Affairs.

At the same time, the government has decided to reduce the size of the projects under the 7,300 km east-west and north-south corridor.

"It is felt that all the roads may not be economically viable as four-lane stretches. So, we have decided to only upgrade those stretches to four-lanes where there is sufficient traffic," an official said.

Government sources told Business Standard that the proposal had been discussed by Prime Minister Manmohan Singh and that it had found favour with him. Based on present international prices, oil companies are registering surplus marketing profits, in addition to the refining margins.

"The consumers are not going to be affected since the oil companies are posting extra-ordinary profits by not bringing the retail price in line with the international prices," said an official.

As part of the restructuring of NHAI, the government has decided to appoint independent experts like those serving in financial institutions on the board of the authority.