Increase cess on petrol and high speed diesel: Parliamentary Committee

The panel also suggested that private players should be handed short term maintenance works on already developed stretches on operate-maintain-transfer basis

In order to deal with paucity of funds for maintenance and repair of National Highways, the parliamentary standing committee has suggested the government to increase the cess on petrol and high speed diesel (HSD) and mobilise the additional accrual entirely for repair purposes.

“The government may consider levy of cess on petrol and HSD oil as per the provisions of the Central Road Fund (CRF) Act, 2000 on ad-valorem basis in place of the current policy of charging it at Rs 2 per litre of petrol and HSD oil,” recommended the committee.

According to ministry of road transport and highways, the allocations that are available annually for maintenance and repair (M&R) of national highways are about 40-60% of the actual requirements. Minsitry added that as maintenance is a non-planned activity, there is a government tendency to apply ad-hoc cuts in the face of resource constraints.

Apart from increasing the cess on petrol and HSD, the committee suggested that private players should be handed short term maintenance works on already developed stretches on operate-maintain-transfer (OMT) basis. The committee felt that maintenance through private parties would be a better choice as it would be completed in lesser time.

“The committee finds no reasons why only 40% of the requirement for maintenance of roads is allocated by the finance ministry,” it said.

Meanwhile, the government expressed its inability to pass the Road Transport and Safety Bill, 2015 – which is going to replace the Motor Vehicles Act, 1988 – as the states are not agreeing on revenue-sharing formula.

“The main hitch is on sharing of revenues, on who and how will the Motor Vehicles Taxation, which is the substantial part of the state revenues, will be shared,” the ministry told committee.

As the state governments are extremely sensitive on this issue, the central government has now formed a group of state transport ministers to deliberate on this bill and at least come to a conclusion on non-controversial issues such as safety issues, penalty issues etc.