No additional cess on petrol, diesel for now

Our Economic Bureau

New Delhi, Jan 4: The decision on levying additional cess on petrol and diesel for financing the second phase of the Rs 54,000-crore national highway development project (NHDP) has been deferred “for the moment.” The transport ministry has been asked to re-work the revenue figures likely to be generated from the project so that fresh estimates of the revenue gap could be made and a decision on levying additional cess could be taken accordingly.

After a meeting with expenditure secretary and transport secretary here on Friday, Planning Commission member NK Singh said, “No decision on the issue of imposing additional cess on petrol and diesel to meet fund requirement for the second phase of NHDP has been taken”.

The issue of additional cess has been hanging fire since June 01 when the transport ministry asked for the imposition of a 30 paise additional cess on petrol and diesel to meet the fund gap for the NHDP.

The Planning Commission turned down the request and instead suggested indexing of cess with inflation, which was in turn rejected by the finance ministry.

The transport ministry wants the additional cess to be imposed during this Budget to ensure enough funds for its ongoing projects. A gap of Rs 16,000 crore in resource availability has been identified for the North-South-East-West corridor project while the gap for the Prime Minister’s Gram Sadak Yojana has been estimated at Rs 37,000 crore, sources said.

Mr Singh said the progress of NHDP was discussed in detail at the meet.

The first phase of the golden quadrilateral project, connecting four metros of Delhi, Mumbai, Chennai and Kolkata with four or six lane highways, would be completed by December 03, he said, adding that there could be some spill-overs.

While funds for the Rs 27,000-crore golden quadrilateral project has been tied-up, the financial closure for the North-South-East-West corridor linking Kashmir with Kanyakumari and Silchar with Porbandar is yet to be achieved.

Mr Singh said the transport ministry has been asked to do some preliminary work on the likely revenue generation from toll on golden quadrilateral projects and the additional resources required for completing the national highway development project.

According to preliminary estimates of the working group for the 10th Plan, Rs 5,000 crore is likely to accrue on this account from 04, Mr Singh added.