Central Road Fund Act, 2000

Under the Central Road Fund Act, 2000 a Central Road Fund (CRF) was found with the primary aim to raise funds for the maintenance and construction of National Highways, State and Provincial Roads, railway over and under bridges. CRF is non-lapsable in nature which is sourced from the cess imposed on the sale of High-Speed Diesel.

Where are the CRF sources from?
  • Under the Finance Act (number 2),1998 an additional excise duty called cess is levied on Petrol and under the Finance Act, 1999 and additional excise duty also called cess is applied on the sale of High-Speed Diesel. At present this cess or road cess is fixed at a value of Rs 2 per litre.
  • Also, the government levies an additional Education cess at 2% and another Higher Education cess at 1% are applied on petroleum products.
  • All the fund collected through these additional duties is transferred to the Consolidated Fund of India. after necessary adjustments are credited to the Central Road Fund through a bill in the parliament.
Uses of Central Road Fund(CRF)

The funds in the CRF are then distributed amongst Ministry of Rural Development, Ministry of Railways and Ministry of Road Transport and Highways as per the rules of the Central Road Fund Act, 2000.

These funds are used for:

  • Maintenance and development of rural roads
  • Maintenance and development of national highways (mostly those with high economic value)
  • Development and maintenance of state roads and interstate roads
  • Construction of railway underpasses and overpasses and construction of safety infrastructure at unmanned railway crossings
Division of Funds:

The Rs 2 cess is utilized in the following manner:

  • 50% of the cess on Highspeed diesel(HSD) on rural roads.
  • 50% of cess on HSD and all of the petrol cess as follows
    • Maintenance and development of National Highways: 57.5%
    • Construction of railway over/under bridge and safety infrastructure: 12.5%
    • Maintenance of state roads: 30%

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