Rural roads scheme hits govt bump

With the government walking a tightrope to control fiscal deficit,it has scaled down the budget allocation for yet another flagship scheme.....

With the government walking a tightrope to control fiscal deficit,it has scaled down the budget allocation for yet another flagship scheme. The United Progressive Alliances UPA flagship rural roads development programme Pradhan Mantri Gram Sadak Yojana PMGSY is expected to get only half the gross budgetary support GBS it has asked for in 2010-2011,say government officials.

PMGSY has received treatment similar to that extended by the finance ministry for the National Rural Employment Guarantee Scheme NREGS,which has been denied a higher allocation for the coming fiscal. NREGS,which had sought an allocation of about Rs 70,000 crore,may get about Rs 35,000 crore only.

PMGSY had raised a demand for Rs 26,000 crore for the coming fiscal,against which it has managed to get only Rs 12,000 crore for 2010-2011. This is likely to put the scheme in a fix,as projects worth Rs 1,22,000 crore have already been sanctioned.

Ever since the scheme took off in 2003-04 the government has released Rs 67,000 crore for it. This implies another Rs 55,000 crore is required to push the progress of sanctioned works running into 3.9 lakh kilometer.

PMGSY has outstanding liabilities worth Rs 50,000 crore with chunk of its borrowings coming from the World Bank and Nabard. About Rs 1,30,000 crore is required for sanctioning of future works involving construction of another 3.4 lakh km of rural roads.

The scheme as a whole requires Rs 2,70,000 crore,including the cost of construction of both sanctioned and future projects.

PMGSY also gets funds to the tune of Rs 4,500 crore by way of diesel cess every year. However,recovery under this head has also been lower by about Rs 900 crore in 2009-2010,say officials. The rural development ministry had leveraged these funds to borrow from World Bank and Nabard.

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So far,the project has reached 60 per cent completion all over India against the target of building 7.33 lakh km by 2013-14.

State to state progress,however,varies. While works in Rajasthan are over 80 per cent complete,

Bihar has managed to construct about 12 per cent of the target length. The project is being Centrally administered by the National Rural Roads Development Authority as the funds are disbursed to states by the Centre.