Budget 2024: Govt to connect 25,000 more villages in phase 4 of rural roads scheme

New Delhi: Finance minister Nirmala Sitharaman said in her budget speech on Tuesday that the government would look to improve all-weather connectivity to 25,000 rural habitations by launching phase 4 of the Pradhan Mantri Grameen Sadak Yojana (PMGSY), which aims to link India’s hinterland with major economic centres. Mint first reported about the postponed launch on 15 July.

The government is expected to expand the definition of “rural habitations” in phase 4 of the project to include even smaller settlements. Currently, PMGSY aims to provide connectivity to the eligible unconnected habitations in rural areas with a population of 500 and in the plains, and 250 in hilly areas, desert areas, tribal areas and certain tribal and backward districts.

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No change from interim budget

Kushal Kumar Singh, partner at Deloitte India said, “Acknowledging the economic multiplier impact of infrastructure development, the government has proposed to continue focussing on capital investment in the sector. While the committed capex is the same as in the interim budget, many new initiatives such as the focus on water treatment, sewage treatment and solid waste management projects in 100 cities, development of additional industrial parks, and expanding PMGSY to another 25,000 habitations could be game-changers in the medium to long term.”

PMGSY is now in its 24th year of operation. The interim budget presented in February had already provided a ₹16,600-crore central outlay for the scheme, which is currently in its third phase. PMGSY-III aims to consolidate 125,000 km of rural links connecting habitations to places such as gramin agricultural markets, higher secondary schools and hospitals. The Road Connectivity Project for Left Wing Extremism Affected Areas (RCPLWEA) is also underway. More than 99% of the work on PMGSY-I and PMGSY-II has been completed.

Myriad issues

In May we reported that while PMGSY has achieved some of its targets, it has been riddled with issues as well. 

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Spending on the scheme, for instance, has consistently undershot Budget estimates. Barring 2021-22, the budgeted amount since 2016-17 has been roughly ₹19,000 crore every year, which was cut to ₹12,000 crore for the current year. A report by the standing committee on rural development, laid in Parliament in July last year, expressed concerns over unspent funds and noted that the need of the hour was expeditious utilization of available finances for faster completion of projects, particularly in states that were lagging.