A PARLIAMENTARY standing committee on Tuesday cleared an amendment to the Central Road Fund Bill, which will enable the government to borrow money from financial institutions to build roads in rural areas. According to the current provision, the government is not allowed to raise money through borrowings for building rural roads. It uses 50 per cent of the cess on high speed diesel oil to fund rural connectivity programmes, while the other 50 per cent goes into development of national highways, state highways and other roads. However, since the cess was not generating enough money to fund all rural connectivity plans, the government had sought to include a provision in the Central Road Fund Act, which would allow it to take loans from public financial institutions and international donor agencies. As a first step, the government intends to borrow Rs 16,500 crore from NABARD over a period of four years. The Standing Committee on Transport, Tourism and Culture-headed by Sitaram Yechury-gave its approval to the proposed changes while noting it should only be an enabling provision and that the modes of borrowing be clearly defined. The committee also cleared the proposal to enable the government to use part of the cess from high-speed diesel oil to be utilised towards repayment of such loans. "The ceiling on the quantum of loan to be taken and the manner of repayment should be clearly specified in the Bill itself. A situation should not arise when most of the proceeds of the fund are being utilised for repayment of loans only," the committee said in its recommendations.
