The Hindu Business Line : State road funding to get Rs 2,300-cr boost

More monies
The central road fund (CRF) is a non-lapsable fund, created through a Parliamentary Act.
Every year, about Rs 1,800-2,000 crore accrues to States through the CRF.
About Rs 2,300 crore is lying unutilised now in the CRF.

Mamuni Das

New Delhi, Feb. 19

State road construction is likely to get a Rs 2,300 crore boost next year with the Department of Road Transport and Highways convincing Finance Ministry to allow disbursal of the central road fund (CRF) on an ‘accrual basis’.

At present, budget allocation for road construction for a certain State was taken as the guiding limit for disbursal of funds to the State.

This implied that even if more funds accrued to the State through the CRF than what was allocated in the Union Budget for a particular year, then the State was limited by the budget provision.

The Government imposes a cess of Rs 2 per litre on petrol and diesel, which is routed towards construction of national highways (NHAI), State roads (Department of Road Transport and Highways), rural roads (Ministry of Rural Development) and road over- and under-bridges (Ministry of Railways). The CRF is a non-lapsable fund, created through a Parliamentary Act. Every year, about Rs 1,800-2,000 crore accrues to States through the CRF, said Mr Brahm Dutt, Secretary, Department of Road Transport.

“About Rs 2,300 crore is lying unutilised now in the CRF, which could have been routed towards construction of State roads and district roads,” Mr Dutt told Business Line.

With the availability of these funds, monies for road construction in States could almost double in the next fiscal, he said.

Several States that have utilised more funds than what was allocated in the budget had been demanding that they be allowed to use funds on an accrual basis as CRF was created through an act of Parliament as a non-lapsable, dedicated fund.

“We had a meeting with the Finance Ministry recently on the issue. We have now decided that the CRF to States be disbursed on an accrual basis,” Mr Dutt said.

Thus, even if the budget allocation is lower than what accrued to the State on account of CRF, then the Government approval would be taken in the supplementary demands.

The Ministry can also prioritise and divert more funds towards those States that have a higher utilisation rate. If there are States which have better utilisation levels, then the Ministry has the power to divert funds to those States, Mr Dutt said. States like Karnataka, Maharashtra and Tamil Nadu have higher utilisation rates while those of Kerala and Madhya Pradesh utilise relative lesser funds, according to 2006-07 data.

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