Amaravati, Sep 18 (IANS): The Andhra Pradesh government on Friday introduced a Road Development Cess of Re 1 per litre on petrol and diesel to raise funds for developing the state road infrastructure, which is currently in a bad shape after heavy rainfall.

"Taking all the factors into consideration and keeping in view the necessity of allocating dedicated funds to road development in the state, the government has decided to levy 'Road Development Cess' of Re 1 per litre on petrol and diesel," said Special Chief Secretary Rajat Bhargava.

The government estimates the cess will fetch up to Rs 500 crore per annum. The money will be transferred to the AP Road Development Corporation for exclusively developing road infrastructure.

According to Bhargava, the Covid lockdown had resulted in the cessation of all economic activities in the southern state, affecting its revenues in the months of April, May, June, July and August.

"In April 2020, the revenue realised in the state was only Rs 1,323 crore as against Rs 4,480 crore realised in April 2019, which accounts for only 29.5 per cent of the total expected revenue," he said.

The tax revenue trend was similar in May, June, July and August.

Compounding the problem, the Central government is yet to release the GST compensation for the year 2020-21.

"While the stress on revenues from all sources continued, there is a steep increase in the expenditure relating to the health services for combating the Covid pandemic," said Bhargava.

Additionally, the southern state is also implementing several schemes for the welfare of the downtrodden sections, incurring costs.

"The twin impact of fall in revenues and enhanced expenditure on health services and welfare schemes has impacted the capital expenditure on infrastructure development," he observed.