These bonds will have a lock-in period of five years and their proceeds will be used for providing finance for the National Highway Development Project (NHDP).

Finance minister Yashwant Sinha pointed out in his Budget speech that the capital gains tax exemption would provide resources for the funding the NHPD. Earlier budgets have announced the levy of cess of one rupee per litre on petrol and diesel, a substantial part of which would go in funding the NHPD.

The cost of the NHPD project, a major initiative for road development announced by Prime Minister Atal Behari Vajpayee, is estimated at around Rs 54,000 crore, said the Finance Minister.

Incidentally, the NHAI has been mandated to implement the NHDP. The latter constitutes 4-6 laning of the Golden Quadrilateral connecting Delhi-Mumbai-Chennai-Calcutta-Delhi and North-South and East-West corridors connecting Kashmir to Kanyakumari and Silachar to Saurashtra repectively and Salem to Cochin. A task force headed by Deputy Chairman, Planning Commission is monitoring this programme and is targeted to be completed by the year 2009. The total length to be upgraded under NHPD is is 13,252 km approx.

The NHAI has already started upgradation of national highways on the Golden Quadilateral and North-South and East-West corridors. Around 504 km have already been four laned, construction is in progress on 716 km and project preparation is in progress in the balance.