The Rs 2 cess you pay every time you buy a litre of diesel and petrol was meant to help improve the country’s roads. But both states and union territories have failed to fully utilise the amount granted to them under the dedicated Central Road Fund (CRF), a corpus created through the imposition of the cess.

The cess on fuel has been levied since 2000-01 under the Central Road Fund Act, 2000, according to which 50 per cent of the cess on High Speed Diesel (HSD) and all the money from the cess on petrol was to be spent on development and maintenance of National Highways, construction of railway over- or under-bridges and for development and maintenance of roads other than national highways or roads of economic importance. While the cess started as Rs 1 per litre on petrol and HSD oil in 2000-01, in 2003, it was increased to Rs 1.50 per litre and in 2005, it was raised by another 0.50 paise for the development of highways.

Figures compiled by the Ministry of Shipping, Road Transport & Highways show that against a Rs 3,796 crore grant from 2004-05 to 2006-07, states utilised Rs 3,333 crore. The amount that each state left unused ranged from 28 per cent to 3 per cent. The figures—part of the ministry’s tally of underutilised allocations in the last three years-recently drew the attention of the parliamentary standing committee. The committee expressed its unhappiness over the fact that the fund—raised from the cess that citizens paid on petrol and diesel—was not being well utilised.

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