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As acquisition of land for national and State highways becomes scarce and the cost of construction of roads, flyovers and bridges goes up, the government is now exploring using water as a means of public transportation.

With the enactment of the National Waterways Act, 2016, the total number of national waterways is now 111. But providing infrastructure such as jetties, terminals, and navigational channels continues to pose a challenge.

The government has proposed an amendment to the Central Road Fund Act, 2000 to enable allocation of about Rs2000 crore from the central road fund (CRF) for developing inland waterways.

Inland waterways of India

India has an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks. The total navigable length is 14,500 km, out of which about 5,200 km of the river and 4,000 km of canals can be used by mechanized crafts.

Inland waterways in India consist of the Ganges (Ganga)–Bhagirathi–Hooghly rivers, the Brahmaputra, the Barak river, the rivers in Goa, the backwaters in Kerala, inland waters in Mumbai and the deltaic regions of the Godavari – Krishna rivers.

Freight transportation by waterways is highly under-utilized in India compared to other large countries and geographic areas like the United States, China and the European Union. The total cargo moved (in tonne kilometres) by the inland waterway was just 0.1% of the total inland traffic in India, compared to the 21% figure for United States. Cargo transportation in an organised manner is confined to a few waterways in Goa, West Bengal, Assam and Kerala.

Water transportation is receiving significant attention in recent times since logistics cost in India is one of the highest among major countries – it is 18% in India versus 8-10% in China and 10-12% in European Union.

While inland waterways are recognised as a fuel efficient, cost effective and environment friendly mode of transport, it has received lesser investment as compared to roads and railways. Since inland waterways are lagging behind other modes of transport the central government has evolved a policy for integrated development of inland waterways.

National Waterways Act, 2016

Under Entry 24 of the Union List of the Seventh Schedule of the Constitution, the Central Government can make laws on shipping and navigation on inland waterways which are classified as National Waterways by Parliament by law.

The Act merges five existing Actswhich have declared the 5 National Waterways.It has declared 106 Waterways as NWs through a single piece of legislation, in addition to the existing five NWs.The Inland Waterways Authority of India (IWAI)which is mandated to develop, maintain and regulate these for navigation would be the nodal agency.


Water transport is not only environment-friendly but also cheaper than other modes of transportIt takes lesser time to transport cargo by waterways and the chances of congestion and accidents on highways are eliminated.There is a huge potential for domestic cargo transportation as well as for cruise, tourism and passenger traffic.There is huge potential for public private partnership (PPP) led investments in dredging, construction, operation and maintenance of barges, terminals, storage facilities, and navigation, as well as tourism.It will help in the generation of millions of job opportunities.It will boost the maritime trade of the states and augment their economies.

The need of amendment to the Central Road Fund Act, 2000

These waterways can be developed as environment-friendly modes of transport. This will decrease the huge logistics cost in India significantly. But the Government will have to figure out innovative ways of financing as they would be requiring about Rs. 70,000 crore to develop these river stretches into navigable transport ways.Government will explore multiple sources of finance, including market borrowings and tapping the National Clean Energy Fund (NCEF) and the Central Roads Fund (CRF).

With the enactment of the National Waterways Act, 2016, the total number of national waterways is now 111. But providing infrastructure such as jetties, terminals, and navigational channels continues to pose a challenge.

Central Road Fund Act, 2000 Act regulates the Central Road Fund (CRF) that is credited with the cess collected on high speed diesel oil and petrol.  This collected amount is then released to National Highways Authority of India, and to the state/union territory governments for the development of national and state highways.  The Bill seeks to allocate a share of this cess towards the development of inland waterways.

Once enacted, Central Road Fund (Amendment) Bill, 2017 will give a big boost to our waterways as cargo transportation through water is a much cheaper and cleaner way of transportation. It will bring down logistics cost that is very high.

Utilisation of fund: Under the 2000 Act, the fund can be utilised for various road projects including: (i) national highways, (ii) state roads including roads of inter-state and economic importance, and (iii) rural roads.  The Bill provides that in addition to these the fund will also be used for the development and maintenance of national waterways. Powers of central government: Under the Act, the central government has the power to administer the fund.  The central government will make decisions on the: (i) investments on national highways and expressways projects, (ii) raising funds for the development and maintenance of national highways, and rural roads, and (iii) disbursement of funds for national highways, state roads and rural roads.  The Bill provides that central government will make all the above decisions for national waterways as well.Allocation of cess: Under the Act, the cess on high speed diesel oil and petrol is allocated towards different types of roads.  The Bill seeks to decrease the allocation of cess towards the development and maintenance of national highways from 41.5% to 39%.  It allocates 2.5% of the cess towards the development and maintenance of national waterways. As per the financial memorandum of the Bill, at the current rate of levy of this cess, the share allocated towards waterways will amount to around Rs 2,000 crore per annum.  The remaining cess amount will continue to be used for the development of other roads such as national highways, state highways, etc.

This move will also offer incentives and certainty for the private sector to invest in the inland waterways transport sector. This would accelerate the development of national waterways by utilising the funds generated by way of cess.

Some of the other steps needed for the development of Inland Water Transportation

Inland navigation is considered to be an energy saving mode of transport. It requires the maintenance of a specified water depth and widthdepending upon the size of vessels expected to use that waterway. This necessitates the release of adequate discharges.The detention of water in upstream storages may put some of the existing navigable waterways out of use unless adequate provision is made to release sufficient water downstream. Therefore, the discharge required to be made for maintaining the required water depth in the reaches of river planned for inland navigation should be made.Sometimes water released for some other purpose may simultaneously serve the requirements of navigation. Efforts should be made plan such complimentary uses as far as possible.Prevention of run off and preservation of water should be planned in all rivers to retain the present discharge level and to augment the lean season discharge which would not only facilitate improved navigability but also result in availability of water for other purposes.In all multi-purpose projects in water resource management, the navigational component should be identified at the inspection stage and provisions made to derive the maximum navigational potential.This is applicable in case of dams’ canalisation and also in planning of diversions as part of flood season.Preservation of existing canals, lakes etc. is an essential ingredient of environmental protection.In case of taking up multipurpose projects on any river the navigational requirement should be kept in view for which a list of navigable waterways in the country is enclosed.


National waterways provide a cost-effective, logistically efficient and environment-friendly mode of transport, whose development as a supplementary mode would enable diversion of traffic from over-congested roads and railways. Hence, the waterways project deserves better regulation and development across the country.

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