Centre, World Bank sign $500m loan accord to finance PMGSY rural roads project

To provide additional financing for the Pradhan Mantri Gram Sadak Yojana (PMGSY) Rural Roads Project, the central government and the World Bank today signed a $500 million loan agreement. The scheme, implemented by Union Ministry of Rural Development, Govt. of India, will build 7,000 km of climate resilient roads, and out of which 3,500 km will be constructed using green technologies, said a Finance Ministry statement.

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

The agreement for the project was signed by Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the government of India and Junaid Ahmad, Country Director, World Bank India, on behalf of the World Bank in the presence of Alka Upadhyaya, Joint Secretary (RC), Ministry of Rural Development.

Sameer Kumar Khare, said “The PMGSY over the years has brought about a paradigm shift in the way rural roads are mapped, designed, monitored and built, involving communities especially women.” 

He further added, “The additional finance will bring a new shift in construction technology using green and low carbon designs and climate resilient construction techniques. Now more rural communities will have access to better economic opportunities and social services.” 

According to the statement, adequate maintenance of the existing 4.6 million km of road network is emerging as a major challenge. Many parts of the existing road network are either vulnerable to or have already suffered damage from climate induced events such as floods, high rainfall, sudden cloud bursts and land-slides.

Watch this Zee Business video

“To support the rural economy and communities and households that depend on rural livelihoods, it will be critical to ensure that infrastructure is built and maintained to withstand climatic changes,” said Mr Junaid Ahmad, World Bank Country Director in India. “This project will demonstrate how climate resilient construction can be integrated in the strategy and planning of rural roads,” Khare added.