Government inks $250 Million Loan Agreement with ADB to Improve Rural Connectivity in 5 States

January 31, 2018

The Union Government has inked $250 Million Loan Agreement with Asian Development Bank (ADB) to Improve Rural Connectivity in 5 States viz. Assam, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal under Pradhan Mantri Gram Sadak Yojana (PMGSY). The loan proceeds will be used to finance the construction of 6,254 kilometres all-weather rural roads in these 5 States under the PMGS).

Key Facts

It is first tranche Loan of the $500 million Second Rural Connectivity Investment Program for India approved by the ADB Board in December 2017. The program is aimed to improve rural connectivity, facilitate safer and more efficient access to livelihood and socio-economic opportunities for rural communities through improvements to about 12,000 kms Rural Roads across 5 States.

Significance of ADB-funded investment program

Provide continued assistance to PMGSY and support the Government’s long-term goal for rural development.
It will have transformative impact in terms of rural economy and will bring greater efficiency in terms of access and connectivity for rural people in 5 States.
Under it about 2,000 technical personnel will be imparted training on road safety and maintenance.
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.
It builds upon $800 million ADB-financed first Rural Connectivity Investment Program in 2012 that added about 9,000 kms of all-weather rural roads in the same States.
The road designs under it take into account climate risks (such as increased rainfall and storm surges) with measures such as greater elevation of road embankments, slope protection, and better drainage.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

PMGSY was launched in year 2000 as a Centrally Sponsored Scheme with an objective to provide single all-weather road connectivity to all eligible unconnected rural villages (habitations). The Union Ministry of Rural Development is nodal implementing authority. It was fully funded scheme by the central government.

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