Inroads into road funds

Not many ministries have the experience of dealing with sums of expenditure in the region of Rs 40,000 crore. So it is not surprising that t...

Not many ministries have the experience of dealing with sums of expenditure in the region of Rs 40,000 crore. So it is not surprising that the Union ministry of road transport and highways thinks that the National Highways Authority of India (NHAI) cannot, on its own, manage to disburse such large sums of money and wants to keep its fingers firmly clasped on the purse strings. It is a different matter that the road cess collected by the government was earmarked to the NHAI and the ministry is only a facilitator, not an administrator, of the project.

More importantly, it may be asked why should the union government micro-manage the disbursal of funds and award of contracts by state governments?

A good case can be made in favour of the proposed centralisation of funds and contracts disbursal on the grounds that the minister in charge, B.C. Khanduri, is known to be an honest politician who will ensure transparency and honesty in the selection of contractors. This is a valid argument but it doesn’t entirely wash. Today, the country is fortunate to have an honest politician at that post. Tomorrow, a ministerial reshuffle could bring in a dubious character. The precedent of concentrating all decision-making in the disbursal of such vast sums of money in one ministry is, therefore, methodologically flawed.

More importantly, different state governments may have different priorities in terms of which roads they will invest in and what technical specifications they would require. If funds are allocated to state governments, they can go ahead and undertake the work and handle the finances. NHAI may be over-worked, as the Union minister has claimed, but surely state public works departments are not. The Union ministry cannot become a substitute for state PWDs. The best option for Khanduri, therefore, is to allow the NHAI and the state PWDs to take on the burden of implementing a larger part of the highways upgradation work, leaving the ministry to do overall supervision. In fact the ministry could be a regulator and ensure that the earmarked funds are properly spent and the projects executed on time.