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Sunday, October 11, 1998

Centre proposes 20% tax on automobiles to fund road projects 

Our Corporate Bureau  
New Delhi, Oct 10: The Union surface transport minister, M Thambi Durai, on Saturday proposed levy of a 10 per cent to 20 per cent tax on all automobiles, the proceeds of which will be utilised for development of roads.

The minister, while addressing the 28th meeting of the transport development council, suggested that additional funds could be generated by accepting deposits from the public on high interest rates.

He said that a rapid increase in the manufacture of automobiles in the country had led to an acute traffic intensity on the roads and strained resources. "In order to ensure improvement and better maintenance of our roads, it is envisaged to generate funds from the vehicle manufacturers themselves," he added.

Stressing the need for developing the road infrastructure at a faster pace in order to sustain economic growth, the minister admitted that the existing road infrastructure was simply not adequate to cope with the demand that would be unleashed as a result of economic growth.

"Thequality of infrastructure needs to be substantially upgraded to facilitate efficiency in the transportation system. The problem has to be tackled at various levels -- the central government, state government as well as at the level of the local governments," he said.

The minister said that the government is considering creation of a dedicated organisation for planning and management of expressways.

Durai said that work was required in all areas such as improved funding of the sector, technological upgradation of construction and maintenance, bringing about a conducive legal and institutional environment, use of information technology in development, management and operation of the country's road infrastructure.

Durai also urged the transport ministers of various state governments to allocate a substantial portion of road-related taxes for development of the road sector. "We would welcome joint ventures between the National Highways Authority of India and the state authorities or constructioncorporations," he said.

The minister said that with a view to further improve the primary transport network in the country, the government has declared 11,068 kms of new national highways, which will also give an economic boost to the economy.The minister said that in line with the liberalisation policy of the government, the endeavour should be to associate the private sector on a larger scale in the process of development, improvement and upgradation of the passenger transport facilities in the country.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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