West Bengal’s decision to align road and building construction costs with national reference rates could force a substantial increase in the state’s infrastructure budget. The change addresses a basic problem in public works: when official cost schedules lag behind market prices, the gap does not disappear. It is absorbed through reduced quantities, cheaper materials, delayed payments or weaker maintenance, all of which eventually become visible to citizens as deteriorating roads and unfinished infrastructure.
According to a report by Anandabazar, the state government will use the National Highways Authority of India’s rate schedule for road infrastructure and the Central Public Works Department’s rates for building infrastructure. Until now, the state Public Works Department has operated with its own schedule of rates, which officials said did not adequately reflect current material and construction costs.
The administrative change is important because a schedule of rates is more than a technical document. It determines the estimated cost of a project, the value of tenders, the payment due to contractors and the amount that departments must request from the budget. If the approved rate is too low, a department may technically have a budget for a road but lack the financial capacity to build it to the required specification.
That appears to be the central issue highlighted by the report. Public works officials said the national rate schedules are considerably higher than the existing state rates. If the department continues to receive broadly similar allocations, it would be able to execute fewer projects after adopting the higher rates. The report therefore links the revised costing system to the need for a significant increase in the Public Works Department’s budget.
The example of bitumen illustrates how a rate mismatch can affect road quality. The report says the state’s existing provision for bitumen was around Rs 30 per kilogram, while its market price was approximately Rs 90 per kilogram. Bitumen is a critical road-building and maintenance input, and such a gap can make the approved estimate inadequate even before work begins. Engineers cited in the report said that cement, sand, steel and stone had also become more expensive over the past several years without a comparable revision in the state’s rates.
The consequence is not automatically that every poorly built road was caused by underpricing. Road quality also depends on design, construction supervision, drainage, traffic loading, maintenance and contractor performance. But an unrealistic cost schedule creates a structural constraint before those factors come into play. A project that is under-costed from the start cannot reliably deliver the same material quantities or specifications as a project based on current prices.
The issue is particularly relevant in a state where roads serve as both everyday public infrastructure and the foundation for economic activity. The report notes continuing complaints about roads deteriorating soon after construction and argues that inadequate infrastructure has also limited the state’s ability to attract investment. In this context, the rate revision is not merely a departmental accounting exercise. It is an attempt to connect the formal cost of public works with the actual cost of building and maintaining them.
The funding problem described in the report also has an institutional dimension. Public Works Department officials said allocations had increased only marginally in recent years, while a substantial share of available funds was used to clear contractor dues. They also alleged that departments did not always receive the full amount allocated in the budget. When past liabilities consume current funds, new construction and routine maintenance compete for the same limited pool of money.
This creates a cycle that is familiar across infrastructure systems. Delayed payments can slow projects and weaken contractor cash flow. Deferred maintenance allows minor defects to become major failures. New projects then require higher expenditure, while the department’s available budget remains tied up in previous commitments. A revised rate schedule can correct the estimate, but it cannot by itself resolve payment arrears or guarantee that the revised allocation will be released and spent on time.
The report places the state’s move alongside increased central support for infrastructure. It says the Union government has begun allocating funds through central road and transport programmes and recently sanctioned nearly Rs 1,000 crore for six roads. If those funds are combined with a larger state allocation, the revised rates could allow more realistic project execution. The report does not, however, establish the final size of the state’s infrastructure budget or specify how the additional funding will be distributed across construction, repair and maintenance.
The choice of national reference rates also reflects a wider administrative question: whether states should maintain separate costing systems when construction inputs are priced through national and international markets. The report says the government will follow the quarterly bitumen price fixed by Indian Oil Corporation Limited. It also notes that India requires approximately 8.5 million tonnes of bitumen annually but produces around 5 million tonnes, with the balance imported. Officials cited difficulties in imports following the Iran war as an additional pressure on availability and prices.
These details show why road budgets can be vulnerable to changes far beyond a state department’s immediate control. Bitumen prices are affected by supply, imports and market conditions, while steel, cement, aggregates and labour costs can change during the life of a project. A schedule that is not periodically updated transfers this volatility to project quality and contractor viability. A schedule linked more closely to recognised national rates may improve cost realism, but it will also expose the state budget to the full financial requirement of its infrastructure commitments.
For citizens, the test will not be the announcement of a new rate schedule but the quality and durability of completed work. A higher estimate should produce roads, bridges and buildings that meet their approved specifications and remain functional for the intended period. That requires transparent tenders, technical supervision, timely payments, quality testing and sufficient maintenance funding. The supplied report establishes the concern over outdated rates and inadequate allocations, but it does not provide evidence on how these controls will change under the new system.
The policy therefore has two linked parts. The first is the correction of the costing benchmark: NHAI rates for roads, CPWD rates for buildings and quarterly bitumen prices as cited in the report. The second is the fiscal decision that must follow. If the state does not increase allocations in line with the new estimates, the immediate result could be fewer projects rather than better infrastructure. If it does increase funding, the larger public expenditure will need to be matched by stronger monitoring of outcomes.
West Bengal’s rate revision brings a hidden infrastructure question into view. Public works fail not only when governments spend too little, but also when the rules used to calculate spending no longer resemble the conditions in which construction takes place. Aligning rates with national benchmarks can make the gap visible. Whether it closes that gap will depend on the final budget provision, the release of funds, the handling of existing contractor dues and the ability of the Public Works Department to convert higher estimates into durable assets.
The report indicates that the state is moving towards a higher allocation for infrastructure, but the final budget decision and implementation details remain to be established. The next milestones are the size of the Public Works Department’s allocation, the application of the revised rates to ongoing and new projects, and whether road and building quality improves after the costing system changes.