||The investment program will construct to all-weather standard about 9,000 kilometers (km) of rural roads connecting around 4,200 habitations in Assam, Chhattisgarh, Madhya Pradesh, Odisha, and West Bengal. For the investments in physical infrastructure to be effective and sustainable, the investment program will also focus on improving institutional arrangements, business processes, and associated capacity building, especially in relation to design, operation, safeguards, finance, road safety, and asset management.
|Project Rationale and Linkage to Country/Regional Strategy
ADB's country partnership strategy (CPS) for India is closely aligned with the priorities of India's Eleventh Five Year Plan, 2007 2012. The CPS reconfirms continuing ADB assistance for development of rural roads, which are critical for rural development as they provide access to markets, health, education, and administrative services. Absence of all-weather road connectivity is a serious problem, making rural communities inaccessible for up to 90 days a year. Poor road infrastructure affects economic growth in rural areas, agricultural productivity, and employment, and has a strong link to poverty. The Government of India is addressing this problem through implementation of a nationwide rural road investment program the Prime Minister's Rural Roads Program (PMGSY) aimed at providing all-weather road connectivity to currently unconnected eligible habitations in India's rural areas. The investment program will support the government's objectives under the PMGSY.
Strategic context and policy framework. The specific contribution of the PMGSY to the achievement of country strategic development goals includes reducing poverty (faster and more inclusive growth), expanding and strengthening rural infrastructure to accelerate agricultural growth and the rural economy, creating jobs, and social development (improved education, health, and social indicators). The PMGSY is also very relevant to the pillars of the policy framework in the road sector, including sustainability (promoting longer-term road maintenance), road safety (mainstreaming road safety audits and community awareness), and seamless connectivity (as rural roads provide the last mile connectivity).
The PMGSY identified the investment program states among the 10 states with large rural populations that lack adequate coverage in terms of all-weather road connectivity. The poverty head count rates in these states are among the highest in India. The PMGSY started in 2000 and has thus far constructed 108,637 km of rural roads in the investment program states, connecting 39,721 habitations to a greater transportation network. Construction of an additional 32,158 km of roads is ongoing. According to the June 2011 program update, 85,690 km of roads to connect all remaining eligible habitations in the investment program states are yet to be constructed under the PMGSY.
The latest estimate for the remaining PMGSY financing requirement to achieve its goal by 2016 in the investment program states is about $7.95 billion, while available PMGSY funding for the same period is estimated to be around $5.04 billion. While exploring the possibilities for domestic borrowing to close the financial gap, the government has approached ADB to provide funding of $0.8 billion under the investment program to assist with the implementation of the PMGSY in the investment program states. The investment program is consistent with the strategic objective set out in the CPS, 2009 2012 and is included in ADB's country operations business plan, 2011 2013.
Apart from the need to provide all-weather road connectivity in India's rural areas, the investment program states need support in improving business procedures covering the whole life cycle of rural roads, and strengthening related capacities. Specifically, while the emphasis is shifting from construction to the operation and maintenance of the rural road network, the related capacities for rural road network management are lagging. There is also a mismatch between the extent of the rural road network (around 80% of the total road network) and supply of skills, as the training of civil engineers, technicians, and site supervisors is oriented towards high-category roads.