The Highway Ministry plans to ask the Finance Ministry to ensure that the additional funds raised through the excise duty hike on fuel go only to building roads.

Non-lapsable fund

While the Highway Ministry had proposed a cess, the Finance Ministry raised the excise duty on petrol and diesel by ₹2/litre, and said that this money would go to the roads sector. But as this is not in the form of a cess or a non-lapsable fund, getting the incremental funds to accrue as a levy requires Parliamentary nod.

Budgetary support

The Highway Ministry receives about ₹28,000 crore from the Finance Ministry as budgetary support for building roads. Of this, ₹22,000 crore comes from its share of the dedicated cess, the tolls it levies or the revenue share received from developers who levy tolls. In effect, the Finance Ministry provides about ₹6,000 crore of additional grant to the roads sector.

Pubic-private partnership

For this fiscal, of about ₹28,000 crore of budgetary support, almost 80 per cent had been spent till December, said sources. “About 4700 km of highways have been awarded this fiscal till now, largely on EPC (engineering procurement contract) basis,” said the official.

For the next fiscal, the Highway Ministry has sought about ₹45,000 crore as gross budgetary support.

The increased excise duty is expected to mop up ₹10,500 crore a year. And in order to build more roads but with lower government contribution, the Highway Ministry is trying to work out a pubic private partnership hybrid annuity model.

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