Rural Connectivity Investment Program for India
In India, nearly 70 per cent of people live in rural areas. This supports the fact that out of the total road network, nearly 70.23 per cent are the rural roads (as on March 2016). It is to be noted that these rural roads have the potential to change the face of the country completely. This is because they can help in poverty alleviation, enable transportation of men, material and goods, lead to diversification of agricultural activities and livelihood opportunities, boost rural as well as overall economic growth of the country and improve the well-being of millions of underprivileged and rural citizens. Given the above-mentioned positives of rural roads, the Indian government has been increasingly focussing on developing rural roads and it has considerably increased its investment in rural connectivity projects.
Here is the list of major rural road development initiatives and investments planned by the government for connecting the rural areas of the country well...
1. Launching of Pradhan Mantri Gram Sadak Yojana (PMGSY): This program was launched by the government in the year 2000 as a centrally sponsored scheme. The main aim of the program is to provide connectivity to unconnected habitations through construction of single all-weather roads. The Union Ministry of Rural Development is the nodal implementing authority. It is a fully funded scheme by the central government.
2. Increased budgetary allocation for PMGSY: Over the years, government has considerably increased the budget allocation for the development of rural roads. In the Budget 2018-2019, rural roads saw an allocation of Rs 19,000 crore under PMGSY and this allocation was up by 12.42 per cent relative to last year’s grant of Rs 16,900 crore.
3. Loan agreement with Asian Development Bank: The union government has inked $250 Million loan agreement with Asian Development Bank (ADB) to improve rural connectivity in 5 states i.e., Assam, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal under PMGSY. The loan proceeds will be used to finance the construction of 6,254 kilometres (kms) of all-weather rural roads in these 5 states under the PMGSY. It is first tranche loan of the $500 million Second Rural Connectivity Investment Program for India approved by the ADB Board in 2017. The Program aims to upgrade about 12,000 kms of rural roads across the 5 states. In October this year, India and the ADB signed a $110 million loan agreement to upgrade all-weather rural roads in Madhya Pradesh under PMGSY. It is the second tranche of the $500 million Second Rural Connectivity Investment Programme for India. It is to be noted that ADB invested a sum of USD 800 million for first Rural Connectivity Investment Programme in 2012 that added about 9, 000 kms of all-weather rural roads in the same states.
4. Allocation in the 12th Five Year Plan: A proposed spending of Rs 126,491 crores on rural roads was announced for the 12th Five Year Plan (2012-2017) which was on par with the total sanctioned amount for PMGSY since inception.
5. Continuation of PMGSY beyond the 12th Five Year Plan period: While it was announced that there will be no 13th Five Year Plan, yet in August this year, the government approved the continuation of PMGSY beyond the 12th Five Year Plan period. This would help in connecting 38,412 habitations at an estimated cost of Rs 84, 934 crore. In this, the central government will share Rs 54,900 crore and the states’ share is Rs 30,034 crore. The target of connecting 1,78,184 eligibile habitations under PMGSY is expected to be completed by March 2019. Almost 95 per cent of these habitations had been sanctioned road connectivity and 91 per cent habitations have been connected. Under PMGSY II, out of the target of 50,000 kms for upgrading roads, work on nearly 12,000 kms road length has been completed.
6. Increased budgetary allocation for the Rural Development Ministry: The total budgetary allocation for the Rural Development Ministry is increased marginally to Rs 1.124 lakh crore for the financial year 2018-2019.
7. Overall increase in rural investment: In the Budget 2018-2019, Centre has planned to spend Rs 14.34 lakh crore in rural areas and this investment is expected to lead to a construction of 3.17 lakh kms of roads among others.
In a nutshell
As per Census 2011, there are 6.4 lakh villages in India, which shelter more than two-third of the countrys population. In such a scenario, the role and importance of rural road infrastructure in India cannot be negated and thus, it is obvious for the government to come up with rural connectivity investments programs on a regular basis.
Well, when the discussion is about rural road infrastructure, then the fact cannot be overlooked that the boost in rural roads construction has a positive impact on the road construction equipment segment for sure. Typically, with high investments expected to pour into the rural road segment over the next few years, road construction equipment industry is likely to get a boost. Here, particularly, motor graders which form an important part of road construction equipment fleet have all the reasons to smile.
Talking about motor graders, then Mahindra Construction Equipment’s (MCE) RoadMaster G75 and the newly launched RoadMaster G90 should be specifically noted. The two affordable equipment are equipped with latest technologies and intelligent features to boost productivity and are suited to work in any environment and terrain of the country. They offer un-compromised and mechanised grading solution for small and medium roads in India. In fact, they are the best solution for Indian rural road construction projects. So, if you are into rural road construction business, then you should definitely consider either of them for better results and profits in long run.