After the NREGA, yet another flagship programme of the UPA government is set to bite the dust. Pradhan Mantri Gram Sadak Yojana (PMGSY), a part of the Centre?s Bharat Nirman designed to upgrade rural infrastructure, is set to hit a roadblock owing to funds shortage.
Having to do a tightrope walk regarding fiscal prudence and financing mega welfare schemes, which are imperative ahead of the general polls in 2009, the finance ministry has expressed its inability to meet the Rs 8,000-crore gross budgetary support (GBS) demand of the rural development ministry, the nodal ministry for implementation of PMGSY in the next fiscal.
The ministry has instead suggested that RD ministry goes for higher withdrawals from Nabard to fund the rural road projects.
The government had created a separate window under Rural Infrastructure Development Fund (RIDF) in Nabard in 2006-07 with an allocation of Rs 4,000 crore to fund PMGSY. However, funds could not be drawn during 2006-07 from this window in the absence of enabling amendment to the Central Road Fund Act, 2000.
The window continues during 2007-08 with the allocation of Rs 4,500 crore for PMGSY. The rural development ministry appears to be the worst hit as the finance ministry has pruned its demands for 2008-09 by at least 27%. The ministry had asked for Rs 41,258 crore and the finance ministry has agreed to about Rs 30,000 crore.
The other major social welfare programmes under the rural development ministry include the National Rural Employment Guarantee Programme (NREGP), accelerated rural water supply programme and Indira Gandhi Awas Yojana for rural housing.
Under PMGSY, the government intends to provide all-weather roads to every village of over 1,000 population, or over 500 in hilly and tribal areas by the end of 2009 by constructing 1,46,185 km roads.
This will benefit 66,802 unconnected eligible habitations in the country.
This is estimated to cost Rs 48,000 crore. In 2007-08, 16,140.46 km of existing rural roads were upgraded and 11,939.50 km of new roads done.