No running away from quadrilateral quandary

The good spell for roads and highways could well continue in Budget ’03-04. The sector, which has seen fund allocations jump leaps and bounds over the last four years, is in for a repeat. The last budget saw a 30 per cent jump in outlays.
The Rs 54,000 crore National Highway Development Programme (NHDP) is clearly a priority, both from theeconomic and political point of view. The socio-economic spillover benefits notwithstanding, the programme may also create political goodwill for the government, which faces polls in ’04. By such time, the government is racing to finish the 6,000-km-long, high-density golden quadrilateral to bring about a visible change in the freight corridors of India.
It is likely that the government will keep the money tap open for its much-pampered sector. But, it is not just enhanced allocations that the sector demands. The surface transport ministry has proposed an additional 30 paise cess on a litre of petrol and diesel to fund the second phase of the NHDP. The National Highway Authority of India has been demanding an additional cess on fuel for over a year now. However, the demand this year assumes significance as work on North-South-East-West corridors is scheduled to take off. But, sections of the government have been uncomfortable with the idea of levying a cess on fuel. Officials said, “We are looking at a special provision for the NHDP-II. The government could either levy a cess on fuel or allocate an amount from other resources.�
This is not all. After the construction of world-class roads on the golden quadrilateral, there is a demand for improving riding quality on other national highways as well. The NHDP covers four-laning of only 14,000 km of national highways, against the total network of about 55,000 km.
The Planning Commission puts an estimate of Rs 1,65,000 crore requirement for correcting potholed roads and improving riding quality, widening, building bridges and repairing of aged assets.
This is perhaps one sector where the government offered all tax incentives to the private sector, right from the beginning.
Companies enjoy a tax holiday and duty exemption for imports of construction equipment. The highway bonds, which the NHAI floated, enjoy benefits under section 54 EC of the I-T Act. It is expected that all these sops will continue for the highway sector.
The industry, however, is seeking some relaxation on the pre-qualification criteria of construction contracts.
There is another policy-related demand from economists and industry thatseeks freedom of inter-state movement of trade. “That will symbolise the real success of a seamless transport system,� economists say.