Gujarat govt to slap cess on fuel to fund core sector

AHMEDABAD: Even as crude oil soars, the Gujarat government is considering levying a cess on petrol and diesel. It wants to create a pool of funds for setting up state roads and highways on the lines of the central government.

While neighbouring Maharashtra and some other Congress-ruled states have lowered state tax rates to reduce the impact of the last price hike, the Gujarat government has not done so. Imposing an additional cess on diesel and petrol which would lead to even higher prices in the state.

A senior state government official mentioned this during a recent presentation at a workshop on the transport sector at IIM-Ahmedabad. He said that a comprehensive port-connectivity roads project is also being prepared to enable a truck starting from any of the state’s ports to reach the Gujarat border within 12 hours’ time. Nirmaljit Singh, member-technical of the National Highways Authority of India (NHAI), told during his address that $50bn is going to be invested through the public-private partnership (PPP) route on national highways in the coming years.

An agreement has been signed for six-laning of the Baroda-Surat highway. “Out of the 1,000-km expressway planned by the NHAI, the first 400 km will be the Vadodara-Mumbai stretch. A detailed project report is being prepared and it may take a year or more before this project is actually awarded to someone,” said Mr Singh.

He pointed out that while 40% of total traffic goes on the national highway, these highways constitute only 2% of the country’s total road network. Similarly, state highways too constitute only 4% of total roads, but they corner around 30% of the traffic.

George Tharakan of the World Bank pointed out that Rs 10 lakh spent on rural roads could lift about 163 people out of poverty. While power and water shortage are easily visible, transport problems do not have such a direct impact. “The World Bank, over the years, has noted that Gujarat is among the most efficient states and is lowest in terms of cost of road construction in India,” said Mr Tharakan.

Gujarat Maritime Board (GMB) CEO HK Dash claimed that the state has set a target for ’20 of handling 40% of India’s total cargo as against the 22% being handled currently. After the success of Mundra, Pipavav and Dahej, GMB is aggressively promoting more port projects to private players.

Mundra Port president Sandeep Mehta pointed out that there is a major shortage of manpower in the ports sector and it needs to be urgently addressed. “Many talented managerial personnel across all levels are unwilling to come and work in ports which are located away from major cities,” said Mr Mehta.

The Press Institute of India had organised the workshop on ‘India’s Transport Sector’ with support from the World Bank in Ahmedabad.