Bihar filling NHAI coffers

For a state long named among the poorest states in the country, Bihar is increasingly emerging as the lifeline for the underperforming National Highways Authority of India (NHAI). The central undertaking’s toll tax collections experienced a dip over the last three years while Bihar’s contribution surged during the period.

Madan Sabanavis, chief economist, Care Ratings, says, “Overall development, fast growing economy, corporate governance and impressive highway projects have fuelled the toll tax collection in Bihar.”

While the NHAI toll tax collection is still 44 per cent below compared to last fiscal, a whopping 27 per cent rise in Bihar’s toll tax collection happened in just first seven months of this fiscal year. Bihar collected Rs 66.08 crore toll tax last fiscal and has already done better this year with the figure having peaked to Rs 84.09 crore until October 2011.

A Zee Research Group (ZRG) analysis of NHAI’s toll tax collection made available by the Ministry of Road Transport and Highways revealed that the overall toll tax collection levels had slipped by 22 per cent between 2009-10 and 2010-11.

The dip in overall toll tax collections comes against the backdrop of the economy growing at about 8 per cent plus average during the period under review. Also, the Bihar growth in collections bucks the overall NHAI trend. Madan Sabanavis, chief economist, Care Ratings, says, “Overall development, fast growing economy, corporate governance and impressive highway projects have fuelled the toll tax collection in Bihar.”

Abhaya Agarwal, Executive Director, Ernst & Young, endorses the same, “Bihar government is directly developing the corridors where traffic density is high. Also, most of these stretches do not have alternate routes resulting in minimum leakages.”

While Bihar and Tamil Nadu led other states in toll tax collection in the first seven months of this fiscal, many states are way below the achievement of their last year collection. States like Madhya Pradesh and Himachal Pradesh lagged behind in tax collection with a deficit of 92 per cent and 82 per cent respectively in comparison to last fiscal.

Toll tax collection in Kerala, Andhra Pradesh, Maharashtra and Uttar Pradesh also remained short by 56 per cent, 54 per cent, 53 per cent and 51 per cent respectively. The National Highways Authority of India (NHAI) is an autonomous agency under the ministry of Road Transport and Highways, mandated to implement National Highways Development Project.

According to Parvesh Minocha, managing director, Feedback Infrastructure, an infrastructure consulting firm, “The key to growth in toll tax collection is ensuring better administration as is the case in Bihar.”

The growth in toll tax collections traditionally reflects an active tourism economy. But Care Rating’s Sabanavis say that tourism is not the only reason behind increasing toll tax collection in select states because the overall development of the state is also a key factor.

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