Highways’ loss is telecom gain

The kitty of ~1.28 trn for 2019-20 is now spread thinly across 12 sectors

TThe amount earmarked for CRIF for 2019-20 is ~54,538.65 crore. The money is expected to be spent on constructing highways and maintaining existing roads

he allocation for National Highways in the road fund will be reduced because of telecom and hospitals getting money from it.

The Modi government has changed the nature of the Central Road Fund and renamed it the Central Road and Infrastructure Fund (CRIF) through an amendment to the Central Road Fund Act, 2000.

The kitty of ~1.28 trillion for 201920 is now spread thinly across 12 sectors.

Launched in 2000, the Central Road Fund was a major revenue source for the government to finance road projects. The money from the fund comes from the road cess on excise duty on petrol and diesel.

The amendment prescribes the road cess be first credited to the Consolidated Fund of India and later, after adjusting for the cost of tax collection, should go to the CRIF.

The amount earmarked for the CRIF for 2019-20 is ~54,538.65 crore.

The money is expected to be spent on constructing highways and maintaining existing roads.

Drinking water and sanitation, health and family welfare, housing, power, railways, and shipping are among the 12 funded by the levy on auto fuels.

In the case of telecom, funds are utilised for creating optical fibre

cable-based networks for defence services, constructing border roads, the national rural drinking water programme, urban and rural housing, railway safety, building rural roads, etc.

“Earlier the share of the Ministry of Road Transport and Highways in the Central Road Fund was nearly 50 per cent. Now that each and every ministry that has anything to do with infrastructure is included in the allocation from the Central Road and Infrastructure Fund, the share of the road ministry has gone down,” said Kushal Kumar Singh, Partner, Deloitte India.

It is estimated to be 42.5 per cent next year, lower than the 45 per cent in the current year.

The NHAI will have to depend on internal generation and borrowings more in 2019-20. The increase on this account is 21 per cent at ~75,000 crore over the current year. The NHAI generates revenue from tolls and road monetisation contracts.

The road monetisation drive or tendering highway contracts on a toll-operate-transfer (TOT) basis is expected to fetch the authority over ~15,000 crore in the next financial year.