Central Road Fund
Also called: CRF, Central Road and Infrastructure Fund, CRIF · Topic: Infrastructure: Transport, Communications and Energy · NCERT: Beyond NCERT
Meaning
The Central Road Fund (CRF) is a fund set aside only for building and improving roads. Its money comes from a tax on motor fuel, so the people who drive on roads help pay for them. It began in 1929, on the advice of the Jayakar Committee (1927–28). At first it was paid for by an extra excise duty (a tax on goods made or sold within the country) on petrol only. Today the Central Road Fund Act, 2000 governs it. The Act puts a cess on petrol and high-speed diesel (HSD). A cess is a tax collected for one named purpose. The fund sits in the Public Account, the part of government accounts that holds money kept for a set use. Over time it grew into the Central Road and Infrastructure Fund (CRIF).
Example
From 1931 the levy was a fixed 2 paise per litre of petrol, later raised to 3.5 paise. Diesel was not taxed. Prices kept rising but the rate stayed the same until 1988, so the fund was worth less each year. In 1988 the levy became at least 5% of the basic price of petrol and diesel, so the fund now rises when fuel prices rise. Even so, the CAG (the government's auditor) found that ₹48,130.71 crore of road cess collected between 2010-11 and 2016-17 was never moved into the fund.
Don't confuse with
- Divisible pool: this is the share of central taxes that the Centre splits with states. Road cess stays out of it. States get road money back only as tied grants, which can be spent only on approved projects.
- Indian Roads Congress (1934): this is a body that sets road standards. It also came out of the Jayakar Committee, but it is not a fund.