The Central Road Fund Act, 2000
11. Administration of States' share of the Fund.-
1. The share of the Fund to be spent on development and maintenance of roads, other than national highways, as specified under sub-clause (b) of clause (viii) of section 10, after deducting the reserve kept by the Central Government for State road schemes of inter-State and economic importance, shall be allocated to various States and Union territories in such manner as may be decided by the Central Government.
2. The portion of the Fund allocated for expenditure in the various States and Union territories shall be retained by the Central Government until it is actually required for expenditure.
3. If in the opinion of the Central Government, the Government of any State or the administration of any Union territory has at any time-
a. failed to take such steps as the Central Government may recommend for the regulation and control of motor vehicles within the State or the Union territory; or
b. delayed without reasonable cause the application of any portion of the Fund allocated or re-allocated, as the case may be, for expenditure within the State or Union territory, the Central Government may resume the whole or part of any sums which it may have at that time held for expenditure in that State or the Union territory.
4. All sums resumed by the Central Government from the account of any State Government or Union territory administration as aforesaid shall be re-allocated between the credit accounts of the defaulting and other State Governments and Union territory administrations in the ratio of the main allocation for the financial year preceding the year in which the re-allocation is made.
5. The balance to the credit of the Fund in respect of any allocation shall not lapse at the end of the financial year.