Rural Connectivity Current Affairs - 2019

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India, ADB sign $200-million loan agreement for upgrading rural roads in Maharashtra

India and Asian Development Bank (ADB) signed 200-million dollar loan agreement for upgrading rural roads in 34 districts of Maharashtra with the objective of improving road safety and better connecting rural areas with markets and services. The agreement was signed between Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs (DEA) in Union Ministry of Finance and Sabyasachi Mitra, Deputy Country Director of ADB’s India Resident Mission.

Key Highlights about ADB Project

Need: In 2016-17 Maharashtra accounted for about 15% of gross domestic product (GDP) but economic development in the state is concentrated around urban centres of Mumbai, Pune, and Thane. About 20 million people (or 17% per cent of state’s population) still live below national poverty line, while in some districts mainly in rural areas it is as high as 40%. Also, Maharashtra’s agriculture accounts for about 47% of employment, engages as much as 79% of rural labour force, and contributes 11% to state GDP.


Under the project the roads in rural areas will improve the condition of about 2100 kilometres of rural roads to all-weather standards. This will boost links between local residents and economic centres across the state.

The project will also work with Maharashtra Rural Road Development Association (MRRDA), the rural infrastructure agency, to develop road safety, road asset management, contract management, and climate resilient design. The loan provided by ADB is accompanied with a technical assistance grant of $1 million to support MRRDA to improve its management performance in these areas.

Total cost of project: is $296 million and out of this government will provide $96 million. The project is due for completion at end of September 2024.

Importance: The upgraded roads under ADB project will improve rural connectivity, boost links between local residents, productive agricultural land, and economic centers across the state. This will further help enhance agricultural productivity and incomes, rural livelihoods and alleviate poverty.

Government inks $110 million loan agreement with ADB to upgrade rural roads in MP

Government has inked $110 million loan agreement with Asian Development Bank (ADB) to upgrade all-weather rural roads in Madhya Pradesh under Pradhan Mantri Gram Sadak Yojana (PMGSY). It is second tranche of $500 million Second Rural Connectivity Investment Programme for India approved by ADB in December 2017.

Rural Connectivity Investment Programme

The overall Second Rural Connectivity Investment Programme is aimed at improving rural connectivity, safe and efficient access to livelihood and socio-economic opportunities for communities in Assam, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal. It plans to upgrade about 12,000 km rural roads across the five states. Tranche 1 loan of $250 million is currently under implementation upgrading over 6,000 km roads.

Key Facts

The Tranche 2 of the loan will provide continued assistance to PMGSY by upgrading rural roads in Madhya Pradesh. This will support the government’s long term goal to achieve inclusive economic growth in rural India. It will also improve mobility for self-employment and livelihood opportunities in rural areas by improving access to district centres. It will also support government’s drive for innovative approaches to reduce costs, conserve non-renewable natural resources and promote use of waste materials in rural road construction.

Asian Development Bank (ADB)

ADB is multilateral lending agency based in Manila, Philippines. It was established on 19 December 1966. It aims to reduce poverty in Asia and the Pacific region through inclusive environmentally sustainable growth, and regional integration. It provides finance to both sovereign countries as well as to private parties. It provides hard loans to middle-income countries and soft loans to poorer countries.

ADB has 67 members – 48 from Asia-Pacific region including India and is collectively owned by these 67 members. The non-Asia Pacific region members are only developed countries. Most of ADB’s lending is concentrated in 5 operational areas viz. Education; Environment, Climate Change & Disaster Management, Finance Sector Development, Regional Cooperation & Integration, and Private sector lending.