THE U.S. HIGHWAY FINANCING SYSTEM AND ITS RELEVANCE FOR INDIA

The article reviews the salient features of the US policy and its historical development. Details are given of the present tax schemes and the use of toll roads to raise funds; federal aided roads must be toll free. The creation of a Federal Highway Trust Fund in 1956, where user charges were dedicated to highway purposes was most significant. The Trust Fund and federal aid programmes were operated on a pay-as-you-go basis. Aid from the Trust Fund is now available to finance mass transit schemes in large cities and federal aid is provided for rehabilitating and reconstructing interstate highways. At present, the amount of federal aid is decided by an extensive legislation and financial process and has to be augmented by state or local government funds for the construction of highways. Examples are given of the method used to allocate and distribute federal aid amongst the states. The legislative economic and institutional systems affecting highways and highway financing are very similar in the two countries, but aid in India is not conditioned by a stated policy or by legislation. There is also a great difference in the economic development of the two countries which influence the relative priorities given to road transportation. The author suggests that although the US system may not be completely suitable for India, it should be used as a starting point and then be refined to suit India's requirements. (TRRL)