Rural Roads Project 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.

Pradhan Mantri Gram Sadak Yojana: Government inks $500 million loan agreement with World Bank

Government (Union Finance Ministry) has signed US $500 million (Rs 3,371 crore) loan agreement with World Bank to provide additional financing for Pradhan Mantri Gram Sadak Yojana (PMGSY) rural road projects. The loan has maturity of 10 years along with 3 year grace period. It will provide additional financing for PMGSY Rural Roads Project to build 7,000 km of climate resilient roads, out of which 3,500 km will be constructed using green technologies.

Key Facts

World Bank has supported PMGSY since its inception in 2004. So far it has invested over US $1.8 billion in loans and credits mostly in economically weaker and hill states across North India viz. Bihar, Himachal Pradesh, Jharkhand, Meghalaya, Rajasthan, Uttarakhand, and Uttar Pradesh. It has helped to built and improved about 35,000 km of rural roads and benefited about 8 million people with access to all-weather roads.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

PMGSY fully funded centrally sponsored scheme launched in 2000. It aims to provide single all-weather road connectivity to all eligible unconnected habitations in the rural areas with population of 500  persons  and  above  (in plain areas) and 250 persons and above (in Hilly States , desert Areas,  Tribal   areas   and   selected Tribal and Backward Districts). Union Ministry of Rural Development is nodal ministry for implementation of Scheme.

For this scheme, 75  paise  per  litre  has  been  earmarked out  of  cess  levied on high speed diesel. It considers habitation as unit for providing connectivity and not a revenue village. The scheme encourages use of “Green Technologies” and non-conventional materials (like waste plastic, geo-textiles, fly-ash, iron and copper slag etc) for constructing rural roads.