Logistics

PMGSY roads maintenance faces fund crisis, needs at least ₹75,000 crore for five years

Tina Edwin New Delhi | Updated on April 07, 2020 Published on April 07, 2020

India’s rural road network built under the flagship Pradhan Mantri Gram Sadak Yojna is in urgent need of repairs but states are not spending enough for the upkeep of these roads, the construction of which started in December 2000. This has been a cause for concern for the Ministry of Rural Development, the nodal ministry for implementation of the scheme, and the Fifteenth Finance Commission chaired by NK Singh.

Taking cognisance of the poor funding for maintenance and upkeep of the PMGSY roads, the Commission has already committed that it would recommend transfer of grants to states when it finalises its report later this year.

The maintenance of these roads will need spending of ₹75,000-80,000 crore over a five-year period starting 2020-21, the ministry has estimated. States will need to spend ₹11,500 crore in the current fiscal year and the required amount would rise to over ₹19,000 crore by 2024-25. It remains to be seen what quantum of grants will be recommended by the Finance Commission, given that the Union government’s revenues are also under stress.

In its interim report submitted to the Union government last year, the commission had noted that “it is extremely important to provide for the maintenance of the PMGSY roads, following the completion of the five-year maintenance contract. This matter will be suitably addressed in our final report based upon overall resource availability and demonstrable efforts made by states in earmarking funds from their own untied resources towards the maintenance of such assets”.

The maintenance of the PMGSY roads in the first five years after construction is the responsibility of the contractor building that road. The maintenance cost for the five years is estimated at 10 per cent of the cost of construction, and it is inbuilt into the construction contract. The cost of construction is shared by the Centre and states in 60:40 ratio in the plains and 90:10 ratio in North East and hilly areas. States are responsible for the maintenance of these roads from the sixth year. However, funding has been inadequate and just about 14 per cent of the roads are being renewed, the rural development ministry has estimated.

Over 6.2 lakh kilometres of roads have been constructed connecting over 1.5 lakh habitations since the programme was launched. Over 2.27 lakh km of these roads are over 10 years old and 1.79 lakh km between five and 10 years old – together that’s about 67 per cent of the length of PMGSY roads that need to be maintained by states.

Arguing for providing grants for road maintenance, the Commission had noted in its interim report that “this huge asset demands a recurring and predictable stream of funds for maintenance. During our discussion with various stakeholders, including the Ministry of Rural Development, it has been brought to our notice that the maintenance of PMGSY roads, unfortunately, receives low priority in the total resources earmarked for development works”.

In its recent meetings with the Ministry of Rural Development, the Commission has also expressed concerns that the rate of deterioration of the roads would accelerate if repairs and renewals are not done in time, and economic gains from building the roads would be lost.

Published on April 07, 2020

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