Objective---To study difficulties faced by the government in implementing the project.

Importance of the study—to know about the importance of the project

Introduction--- the Prime Minister’s Rural Road Program - Pradhan Mantri Gram Sadak
Yojana – is an intervention undertaken by the Ministry of Rural Development as a poverty
alleviation Strategy. The program was launched in December 2000, and aimed specifically at
connecting rural habitations with the construction of all weather roads. In the first phase of the
program, those rural habitations with populations of over 1000 would be eligible, and in the
second phase habitations with populations between 500-1000 would be eligible. In hill states,
desert and tribal areas with populations of over 250 would be connected. No further work can be
undertaken by the PMGSY once a habitation is connected to another by an all weather road.
The PMGSY is a means of increasing agriculture and other income by improving economic and
social services in rural areas. Along with the technical feasibility study of core link roads, it is
mandatory to analyse the strategic and practical needs of the people before reaching a final
decision of building the road with particular alignment and quality. Thus, a Social Analysis of
those who are affected and benefited by the road connectivity should be conducted. The
assessment and recommendations, both, demand-people oriented approach and micro-planning.
Planning and implementation of PMGSY should also assess demand, absorptive capacity,
rehabilitation issues as well as adverse impacts (if any) of such road links. Hence, the scheme not
only needs to take care of technical aspects, or quality of all weather road, but also take into
account local people’s views, options, needs and experiences.
Keeping this in mind, in 2003, the Ministry of Rural Development (MORD) prepared an
Environmental and Social Management Framework (ESMF) for application on Bank funded
works under this project, which was endorsed by participating states in 2004. The safeguard
instruments that were developed are (i) Environment and Social Management Framework; and
(ii) Resettlement and Participation Framework (R&PF). The implementation of the measures
suggested in these instruments need to be in conjunction with Operations Manual (OM) prepared
for the PMGSY road projects. Furthermore, the concerned legislations, policies and special
provisions (Tribal, Vulnerable Groups etc.) need to be reviewed. The social issues are to be
addressed through participatory mechanism (Community Planning) involving information
sharing and sensitisation of PAPs / PAFs with the help of various agencies and community
groups.
The process may be difficult and time consuming and sometimes steps are skipped. TheMinistry
of Rural Development, NRRDA and Planning Commission have commissioned studies to
understand the impact, constraints, gaps etc. These studies have pointed out various gaps like:
(iii) The Memorandum of Understanding signed between the project proponent and PAPs is not a
legal entity for mutation.
(iv) No verification of ownership of land impacted or likely to be impacted is done unless them
landowner has raised an objection during land width accretion. the last 4 years, the Pradhan
Mantri Gram Sadak Yojana (PMGSY) has made a place for itself as a programmed characterized
by detailed planning, methodical execution, careful management and high quality consciousness.
This has been possible due to the close interaction between the Ministry of Rural Development
and the State executing agencies as well as involvement of the Principal and State Technical
Agencies and senior Engineers of the State and Central Governments including retired Engineers
working as National Quality Monitors. Clear and detailed documentation on the construction
standards in the form of the Book of Specifications, Rural Roads Manual and Standard Data
Book published by the Indian Roads Congress (IRC) supported by the Quality Control
Handbook for quality management have contributed significantly in the process.

At the operational level, the establishment of PMGSY on a firm foundation has come through a
series of operational guidelines issued by the Ministry of Rural Development and the National
Rural Roads Development Agency (NRRDA) from time to time, mainly the result of Regional
Review meetings with the State agencies, on such matters as District Rural Roads Planning,
Quality Monitoring, Online Monitoring & Management System, Fund Flow & Accounting
procedures, etc. Indeed the overall volume of such guidelines has become extensive enough for a
need to put them all down systematically in the form of one comprehensive ‘Operations
Manual’. Hence this publication.

The Operations Manual is intended for day-to-day use as a comprehensive supplement to the
PMGSY Guidelines on procedural aspects. On technical aspects the IRC publications will of
course need to be consulted. In the process of drafting the Operations Manual, efforts, have been
made to address the need particularly of the Programme Implementation Units (PIUs) and much
of the Manual is consciously targeted at them, since ultimately the success of the programmed
depends on the degree to which the PIU understands and complies with the letter and spirit of the
PMGSY Guidelines.

Rural Roads being a State subject, the Operations Manual has rightly left sufficient flexibility
and scope for the State Government and the SRRDA to be able to issue detailed guidelines in
keeping with the procedures and requirements of the individual States. There is also a realisation
that micromanaging the programme centrally might neither be desirable nor feasible. At the same
time, there is an expectation that guidelines of the nature envisaged in the Operations Manual
will facilitate to the systematic implementation of PMGSY, and in fact State Governments may
find it advantageous to adopt many of the principles and practices mentioned in the Manual in
rural roads Programmes other than the PMGSY.
State level Agencies

7.1       Each State Government / UT Administration would identify one or two suitable Agencies
(having a presence in all the Districts and with established competence in executing time-bound
road construction works), to be designated as Executing Agencies. These could be the Public
Works Department / Rural Engineering Service / Organisation / Rural Works Department / Zilla
Parishad / Panchayati Raj Engineering Department etc. who have been in existence for a large
number of years and have the necessary experience, expertise and manpower.  No
Agency/Consultant shall be created by the States for implementation of the programmes. In
States where more than one Executing Agency has been identified by the State Government, the
distribution of work would be done with the District as a unit. In other words, each District will
be entrusted to only one Executing Agency. The Executing Agency will have a Programme
Implementation Unit (PIU) in the District, which should  have an officer of the rank of
Executive Engineer as its head.

7.2       Every State Government / UT Administration shall nominate a Department as the Nodal
Department, who will have the overall responsibility for implementation of the PMGSY in the
State. This would be the Administrative Department responsible for the Executing Agency
entrusted with the execution of the road works. In the event of there being two Executing
Agencies, the Department responsible for the major of the two Agencies shall be the Nodal
Department. All communication between the Ministry of Rural Development and the State
Government would be with and through the Nodal Department / State-level Agency.

7.3       The Nodal Department will identify a State-level autonomous Agency (Society etc),
with a distinct legal status, under its control for receiving the funds from the Ministry of Rural
Development, as indicated in Para 18 below.  If there is no such State-level Agency, the Nodal
Department will take steps to register an Agency under the Registration of Societies Act, (there
should not be more than one Agency),  so as to be able to receive the funds. The Agency will be
headed by the Minister or the Chief Secretary and the Secretary in charge of the Nodal
Department or a senior officer will be the Chief Executive. All the proposals will be vetted by
the Agency before they are put up before the State-level Standing Committee and are sent to the
NRRDA for clearance by the Ministry of Rural Development.

7.4       Each State Government shall set up a State-level Standing Committee (preferably
headed by the Chief Secretary) to vet the Core Networks and the Project proposals to ensure that
they have been formulated in accordance with the Guidelines.  The State Level Standing
Committee would also be responsible for close and effective monitoring of the Programme, and
oversee the timely and proper execution of road works.

8          Preparation of Project Proposals and their clearance

8.1       After approval by the District Panchayat (refer Para 6.1 above), the proposals would be
forwarded through the District PIU to the State-level Agency (refer Para 7.3 above).  The PIU
will at that time  prepare the details of proposals forwarded by the Members of Parliament, and
action taken thereon,  in Proformae MP -I and MP –II and send it along with the proposals.

8.2       The State-level Agency shall vet the proposals to ensure that they are in accordance with
the Guidelines and shall place them before the State-level Standing Committee. The size of State
project proposals as well as the time when they would be forwarded to the NRRDA will be as
specified by the Ministry / NRRDA each year.

8.3  The State Level Standing Committee would scrutinise the proposals to see that they are in
accordance with the Guidelines and that the proposals of the Members of Parliament have been
given full consideration.  After scrutiny by the State Level Standing Committee, the Programme
Implementation Units (PIUs) will prepare the Detailed Project Report (DPRs) for each proposed
road work. The preparation of DPR requires collection and analysis of data required for the
design of Pavement and Cross-Drainage works such as Inventory and Engineering surveys, Soil
investigations, Hydraulic data etc. The cost of preparation of DPR @ not more than Rs. 10000
per kilometre may be included in the Project Cost. Similarly, a fixed amount of not more than
Rs. 10000 per kilometre (on actual basis) may be included in the Project Cost as cost for fixation
of Sign Boards, Road Stones and other Road Furniture as per IRC specifications. Rupees 5000/-
per function for foundation/inauguration ceremonies may also be included. Attached to the DPR
will be a separate Benchmark indicator report giving status of key indicators of education, health,
incomes etc. of each of the Habitations proposed to be connected (Data from Habitation Data in
Format-I developed for the  District Rural Roads Plans/ Census may be used).

8.4       The PIU will follow the following Guidelines in preparing the Detailed Project reports:

(i)                  The Rural Roads constructed under the Pradhan Mantri Gram Sadak Yojana must
meet the technical specifications and geometric design standards given in the Rural Roads
Manual of the IRC (Publication IRC:SP20:2002). Most of the new connectivity is likely to carry
traffic of low intensity. It may be noted that the Rural Roads Manual allows for a carriageway of
3.0m where traffic intensity is less than 100 motorised vehicles per day and where the traffic is
not likely to increase due to situation, like, dead end, low Habitation and difficult terrain
condition. To ensure economy in respect of link roads, the carriageway width may be restricted
to 3.0m in all such cases with corresponding reduction in roadway width etc. as per the Rural
Roads Manual.  

(ii)      The Rural Roads under the Pradhan Mantri Gram Sadak Yojana will be surface roads,
and, by and large, sealed surface roads. Roads with a bituminous or cement concrete surfacing.
The choice of surface would be determined, inter alia, by factors like traffic density, soil type
and rainfall, following the technical specifications laid down in the Rural Roads Manual
(IRC:SP20:2002).

(iii)        Where the road work is passing through a Habitation, the road in the Built-up area and
for 50 metres on either side may be so designed that it is not damaged by water. For this the
roads will be designed and executed as Cement Road or with Paved Stones, besides providing
side drains. Appropriate side drains will also be provided, so that improper drainage does not
damage the road. 

(iv)      The Rural Roads Manual speaks of the advantages of using Modified Bitumen in place of
ordinary Bitumen. Where State Governments have taken a decision to use Modified Bitumen
[including Rubber Modified Bitumen (RMB)] in any of their Programmes, such use shall be
extended also to the PMGSY roads. The use of Modified Bitumen (including RMB) would be
restricted to Surface Course only (wearing course). Care should be taken to ensure strict Quality
Control, in accordance with the provisions of IRC Code – IRC53:2002. Special care is to be
taken for quality control by measures such as procuring Bitumen from the refineries,
procurement in bulk and rigorous testing for quality while applying the Bitumen. All the tests
prescribed in the Rural Roads Manual or by IRC:SP20:2002 or IRC53:2002 shall be followed.

(v)                Wherever locally available material, including products like Fly Ash is available,
they should be prescribed subject to adherence to technical norms.  

(vi)              The Rural Roads constructed under PMGSY must have proper drainage facilities  As
regards the Cross-Drainage works under the Programme, normally only minor bridges i.e. those
having a length of upto 15 metre would be taken up. Longer bridges would also be admissible
under the Programme but only after inspection by an officer of the rank of Superintending
Engineer or above in case of bridges between 15-25 metres and by a joint team of the State
Technical Agency and senior Engineers , who shall confirm the need as well as design of the
proposed structure. Due consideration needs to be paid to the cost and benefits accruing from the
bridge. Similarly, in case of the Hill States, the length of CD works could be longer but the cost
of one CD work should not normally exceed Rs. 25 lakh.  The bridges may be so designed as to
serve, where feasible, as  Bridge-cum-Bandharas. However, in such cases, prior commitment of
the beneficiary group / village Panchayat regarding its operation and maintenance should be
obtained.

9          Scrutiny of project proposals

9.1       Ministry of Rural Development has identified in consultation with each State
Government, reputed Technical Institutions to scrutinise the project proposals prepared by the
State Governments, provide requisite technical support to the State Governments, and undertake
Quality Control tests upon specific request. These are being referred to as the State Technical
Agencies (STA). The coordination of activities of the STAs would be performed by the NRRDA,
who may add to or delete from the list of institutions, as well as to entrust specific tasks from
time to time. The Ministry of Rural Development/ NRRDA may from time to time identify
additional technically qualified agencies to provide these services to the State Governments and
to perform such other functions as may be necessary in the interest of the Scheme.

9.2       The PIU will forward the  proposals alongwith the Detailed Project Reports to the State
Technical Agencies for scrutiny of the design and estimates. The Proformae  F-1 to F-8 will form
part of the DPR. These will be forwarded at the level of the Superintending Engineer or the
supervising officer of the PIU, before they are sent to the State Technical Agencies. A summary
of the road works will be prepared in Proforma-‘B’, circulated by the Ministry / NRRDA. 

9.3       The DPRs are to be scrutinised by the State Technical Agency (STA) in the light of the
PMGSY Guidelines, IRC specifications as contained in the Rural Roads Manual / IRC
SP20:2002 and the applicable Schedule of Rates. In doing so, it shall be ensured that no lead
charges would be payable for transportation of soil (except in case of Black Cotton Soil / Sodic
soil). The STA will countersign the Proformae, whereupon the PIU will forward the same to the
State-level Agency.

 
9.4       The State-level Agency will consolidate the proposals from each PIU, after verifying that
they have been duly scrutinised by the respective STAs. They will then prepare the State
Abstract and send all the Project proposals to the NRRDA alongwith the proformae MP-I and
MP-II of each District as well as the proformae.

 9.5      The NRRDA will thereupon scrutinise the proposals from the State Level Agency to
ensure that the proposals have been made duly keeping in view the Programme Guidelines and
that they have been duly verified by the STAs. The proposals for each State would then be put up
before the Empowered Committee for consideration.

10        Empowered Committee

10.1     At the Central level, the Project proposals received from the State Governments would be
considered by an Empowered Committee, to be chaired by Secretary, Department of Rural
Development. The representatives of the State Government, whose projects are being considered
by the Empowered Committee, may be invited to attend the Meetings, as and when required. The
Recommendations of the Empowered Committee would, thereafter, be submitted to the Minister
of Rural Development for clearance.  

10.2     The Ministry will communicate the clearance of the Proposals to the State Government. 
It may , however, be noted that clearance by the Ministry does not imply Administrative or
Technical sanction of the proposals. The well established procedures of the Executing Agency /
ies in this regard would continue to be followed.

10.3     Once approved, the alignment of the road should not be changed without obtaining the
concurrence of the District Panchayat, the State Technical Agency and the State level Standing
Committee.

11        Tendering of works

11.1     After the project proposals have been cleared by the Ministry, the Executing Agency
would invite tenders and commence work on the projects. The well-established procedure for
tendering, through competitive bidding, would be followed for all projects.  All the projects
scrutinised by the STA and cleared by the Ministry, will be tendered as such, and no changes
shall be made in the work. The States will follow the Standard Bidding Document, prescribed by
the Ministry of Rural Development, for all the tenders.
 

11.2     All State level formalities relating to issue of tender notice, finalisation of tender and
award of works should be completed within 120 days of clearance of the project proposals 
failing which it will be deemed that the works in question have been cancelled. A report on the
circumstances in which the work could not be awarded must be sent to the National Rural Roads
Development Agency (NRRDA). The State Government would also stand to lose that amount. 

11.3     In case the value of tenders received is above the estimate that has been cleared by the
Ministry, the difference (tender premium) will be borne by the State Government. 

12        Programme Implementation Units

12.1     At the District level, the Programme will be co-ordinated, and implemented through the
Executing Agencies. While, for all the Districts, it is desirable that a dedicated Programme
Implementation Unit (PIU) is set up, this is especially desirable for all States having an annual
Allocation of Rs. 75 crore or more per annum under the PMGSY, and all the participating States
in the externally aided projects. The Programme Implementation Unit at the District Level may
typically be headed by an Engineer not below the rank of Executive Engineer. All PIUs will be
manned by competent technical personnel from amongst the available staff or through
deputationists. No new posts will be created for the purpose.  In other States, the PMGSY works
will be executed by the Executive Engineers.  The Executive Engineer as well as the heads of
PIU (as the case may be) will be designated as officers of the State Level Agency, so as to enable
them to operate on the funds of the Agency.

12.2     All staff costs will be borne by the State Government.  The Pradhan Mantri Gram Sadak
Yojana does not provide for any staff costs.

12.3     No Agency charges will be admissible for road works taken up under this Programme.
The Executing Agencies will not levy charges in any form, such as Centage charges etc.
Expenditure on foundation and inauguration ceremonies to be done by MPs, upto Rs. 5,000 per
function, may however be charged to the project.        

 
13          Execution of Works

13.1     The relevant projects would be executed by the PIUs and completed within a period of 6
months, from the date of issue of the Work order. Delayed execution of projects, could adversely
affect clearance of the proposals in subsequent years. PMGSY does not provide for any cost
over-runs. 

13.2     Except for Hill States, the Road works under the PMGSY shall not be taken up in stages.
Once road works are taken up, they should be completed to the requisite Technical
Specifications in the prescribed time-frame.

13.3        In case of the Hill States (North-East (except Assam), Sikkim, Himachal Pradesh,
Jammu & Kashmir, Uttaranchal) and the Andaman & Nicobar Islands, however, two working
seasons- about 18 months – may be allowed to the Executing Agency to complete the projects
cleared by the Ministry of Rural Development under the Programme. This is to enable the
formation to stabilise  during one season, followed by Metalling and surfacing in the subsequent
working season.

13.4     Any cost over-run, either due to time over-run or for any other reason whatsoever, would
have to be borne by the State Government. To avoid such a contingency, the Executing Agency
will incorporate suitable Penalty Clauses, as indicated in the Standard Bidding Document.

13.5     An important principle of the Pradhan Mantri Gram Sadak Yojana is the assured
availability of funds, so as to facilitate timely completion of road works. It shall be the
responsibility of the Executing Agencies to ensure timely payments to the contractors, subject to
satisfactory execution of work. Delays,  in payment due, should be avoided.

13.6     To maintain quality and to ensure timely completion of works, the Ministry of Rural
Development may lay down a scheme of incentives/disincentives to the States.

 
14        National Rural Roads Development Agency

14.1     The Ministry of Rural Development have set up the National Rural Roads Development
Agency (NRRDA) to provide Operational and Management support to the Programme. The
NRRDA will provide support, inter alia, on the following:

(i)     Designs & Specifications and Cost norms.

(ii)    Principal Technical agencies (PTAs) and State Technical Agencies (STAs)

(iii)   District Rural Roads Plans and Core Network.

(iv)   Scrutiny of Project Proposals

(v)          National Quality Monitors

(vi)        Monitoring of progress of the PMGSY

(vi)   On-Line Management & Monitoring System

(vii)  Training, Workshops, Research, Pilot Projects and Literature.

(viii)  Human Resource Development

14.2     In respect of the Pradhan Mantri Gram Sadak Yojana, all State Governments / UT
Administrations will ensure timely furnishing of all necessary reports, data and information to
the National Rural Roads Development Agency.

15        Quality Control and Supervision of Works

15.1     Ensuring the quality of the road works shall be the responsibility of the State
Governments/ Union Territory Administrations, who are implementing the Programme. To this
end, all works will be effectively supervised. The Quality Control Register prescribed by the
NRRDA shall invariably be maintained for each of the road works. Payment shall not be made to
the Contractor unless the tests have been found to be successful. The record of tests shall be
computerised on the format prescribed by the NRRDA.

 
15.2     The roads constructed under this Programme are expected to be of very high standard,
requiring no major repairs for at least five (5) years after completion of construction. In order to
realise this objective, suitable clauses relating to Performance Guarantee/routine maintenance
shall be included in the Contract Documents, as per the provisions in the Standard Bidding
Document. In particular, the State Government shall obtain a Bank Guarantee from the
Contractor for 10% of the value of the work, which should remain valid for the 5 year period and
should be discharged only after consulting the Panchayati Raj Institution responsible for
maintenance (See Para 17.1).

15.3     A three-tier Quality Control mechanism is envisaged under the Pradhan Mantri Gram
Sadak Yojana. The State Governments would be responsible for the first two-tiers of the Quality
Control Structure, and would also bear the cost of the two tiers at the District and the State level.
The PIU or the Executive Engineer will be the first tier, whose prime responsibility will be to
ensure that that the all the materials utilised and the workmanship  conform to the prescribed
specifications. They shall also ensure that all the tests prescribed by the National Rural Road
Development Agency, are carried out at the specified time and place by the specified person/
authority.

15.4     As the Second-tier of the Quality Control Structure, periodic inspections of works will be
carried out by Quality Control Units, set up / engaged by the State Government, independent of
the Executive Engineers / PIUs. These officers/ Agencies would be expected to carry out random
tests and also get samples of material used tested in laboratories of the State Government as well
as, in certain cases, independent laboratories, say those of the State Technical Agencies. The
State Governments will issue the requisite guidelines in this regard.

15.5     It shall be mandatory to record, in the relevant module of the On-line Management &
Monitoring System (OMMS) ,  all the test results carried out by the two-tiers indicated above.

15.6     Each State government / UT Administration will appoint a senior Engineer (not below
the rank of Superintending Engineer) to function as State Quality Coordinator at the State
level. His / her function will be to oversee the satisfactory functioning of Quality control
mechanism within the State / UT.  This function would also involve overseeing the follow up
action on the reports of the National Quality Monitors. The Quality Coordinator should be part of
the State level Agency.

 
15.7     As the third-tier of the Quality Control Structure, the NRRDA will engage Independent
Monitors (Individuals / Agency) for inspection, at random, of the road works under the
Programme. These persons are designated as National Quality Monitors (NQM). It will be the
responsibility of the PIU to facilitate the inspection of works by the NQM, who shall be given
free access to all records, administrative, technical and financial.  

15.8     The National Quality Monitors, shall inspect the road works with particular reference to
Quality. They may take samples from the site and get them examined by any competent
Technical Agency / Institution. They shall also report on the functioning of the Quality Control
mechanism in the District.  The Monitors shall submit their report to the NRRDA,  through the
medium of the On-line Management & Monitoring System. The reports of the NQMs will be
sent by NRRDA to the State Government for appropriate action within period to be specified. In
respect of works-in-progress, in case quality check reveals ‘Poor’ or ‘Average’ work, the State
Government shall ensure that the contractor replaces the material or rectifies the workmanship
(as the case may be) within the time period stipulated. In respect of NQM Reports, the State
Government shall, each month, report on the action taken on each of the Reports pending with
the State Government. All works rated ‘Poor’ and ‘Average’ during work-in-progress shall be re-
inspected by an NQM after a rectification report has been received from the State Government.

15.9     The State Governments / UT Administrations shall put in place systems to identify and
take appropriate action (including blacklisting in serious cases) against the Contractors and the
Field Engineers who are found negligent in ensuring the quality of road works. Where the
completed work of a Contractor is found to be ‘Poor’ or ‘Average’, the Contractor concerned
shall be blacklisted by the State and no PMGSY works are to be given to such Contractor in
future. States/ UTs should also consider blacklisting such Contractors for works under other
State Government programmes. The State Governments / UT Administrations shall ensure that
all the PMGSY road works qualify to be rated at least as  ‘Good’ during implementation and
‘Very Good’ when completed. 

15.10   The On-line Management & Monitoring System has a provision by which a ‘Red Pole’
would appear against a work if  any of the tests on that road work are unsuccessful. Similarly
where the NQM finds that the quality of the Work is ‘Poor’ or ‘Average’,  a Red Flag appears
against the work. In case of a Red Pole, the payment shall not be made unless the work is
rectified and the tests are successful. In case of a Red Flag, the payment shall not be made unless
the Superintending Engineer (Supervisory Engineer to the PIU in case of PIUs) inspects the work
and is satisfied that all the defects have been rectified.
 

15.11   Recurrent adverse reports about quality of road works in a given District / State might
entail suspension of the Programme in that area till the underlying causes of defective work have
been addressed.

15.12   The State Quality Coordinator/ Head of PIU shall be the authority to inquire into
complaints/representations in respect of quality of works and they would be responsible for
sending a reply after proper investigation to the complainant within 30 days.  The State Level
Agency shall monitor the disposal of complaints and the NRRDA shall liaise with the State
Level agencies to ensure prompt attendance of all complaints/representations.

16        Monitoring

16.1     Effective monitoring of the Programme being critical, the State Governments / UT
Administrations will ensure that the officials are prompt in sending the requisite reports /
information. to the State level Agency as well as the NRRDA. The On-line Management &
Monitoring System will be the chief mechanism for monitoring the Programme. To this end, the
officials are required to furnish, ‘on line’, all the data and information, as may be prescribed by
the NRRDA from time to time, in the relevant module of the On-line Management & Monitoring
System. They shall be responsible for uninterrupted maintenance of the Computer Hardware and
Software as well as the Internet connectivity. The Software for the OMMS shall be supplied by
the NRRDA and it shall not be modified at any level in the States; any requirement or suggestion
for change shall be intimated to the NRRDA.  In case of continued failure to update data on the
OMMS, further releases to the State could be affected.

16.2     The State Government should provide necessary manpower, space and facilities to set up
the Computer Hardware at the District and State Level  apart from ensuring regular and timely
feeding of data. Since most of the data would reside on the State Servers, the State level Agency
must ensure that the State Server is functional all 24 hours.

16.3     It shall be the responsibility of the Executive Engineer / Head of the PIU to ensure
effective up-time of the Hardware and also the Internet connectivity, with the State Server and
the Central Server, of the Client Machines at the PIU/ District level. He  /she shall be responsible
for the constant updating and accuracy of data relating to the progress of road works, record of
Quality control tests as well as the payments made. The data shall be updated as warranted but at
least once a week. He /she shall also ensure that the photographs and video clips of each road
work are regularly, and at least once every month, uploaded into the System.
 

16.4     Each State government would identify one officer of sufficient seniority and having
adequate knowledge of Information Technology to function as State IT Coordinator. His / her
function will be to oversee the regularity and accuracy of the data being furnished by the
Districts. The IT Coordinator, who shall form part of the State-level Agency, shall also be
responsible to oversee the upkeep of the Hardware and Software as well as the training
requirements of the personnel dealing with the PMGSY.

16.5     The District Vigilance and Monitoring Committee set up by the Ministry will also
monitor the progress and exercise vigilance in respect of PMGSY.

17        Maintenance of Rural Roads

17.1     While submitting the project for approval, each State Government / UT Administration
shall identify a suitable  Panchayati Raj Institution (District Panchayat/ Intermediate Panchayat),
for undertaking the maintenance of the entire Core network and particularly the road works
constructed / upgraded under this Programme. The State Government should issue necessary
instructions to associate the identified Panchayati Raj Institutions with the execution of the work
at all stages, especially submission of periodic reports relating to progress and  quality of works. 
The State Authorities will be required to furnish an Undertaking that they would remit (to the
identified Panchayati Raj Institution), from the State Government funds, the requisite cost of
Maintenance. The State Governments will also offer an Undertaking for the release of
maintenance costs, alongwith their project proposals. The Ministry of Rural Development would
oversee the implementation of this undertaking. It shall be open to the State Governments /
Panchayati Raj Institutions to develop sustainable alternative sources of funding for undertaking
the Maintenance function.  It must be emphasised that given the huge quantum of investment
involved in the Programme, the specification and enforcement by the State Governments of a
satisfactory mechanism to provide funding and other assistance for the proper maintenance of the
PMGSY assets will be key to continuance of the Programme in that State.

17.2     The Rural Roads will be handed over by the PIU, on completion of the contract
(including guarantee/maintenance period of 5 years), to the designated Panchayati Raj Institution
for Maintenance, and a separate report will be made in all such cases under OMMS giving the
name of the PRI and the date of its taking over. 
 

Part  III  -  Flow   of funds, procedure for release and Audit

18        Flow of Funds

18.1     The State-level Agency (refer Para 7.3 above) shall select a branch with internet
connectivity at the State Headquarters, of any  Public Sector Bank or Institution based Bank for
maintaining an Account of the Pradhan Mantri Gram Sadak Yojana.  Once selected, the Account
shall not be changed to any other Branch or Bank. There will be a written undertaking from the
Bank that it will follow the Guidelines of Government of India for payments from the PMGSY
Funds.  The concerned branch will maintain Internet connectivity and enter the data into the
relevant module of the On-line Management & Monitoring System.

18.2     The State  level Agency will communicate to the NRRDA and to the Ministry the details
of the Bank branch and the Account number.  The Ministry of Rural Development shall release
the funds, only into this Account, on the recommendation of the NRRDA, who shall satisfy
themselves that the requirements in the Guidelines have been met.

18.3     The State level Agency will maintain only one Account for PMGSY funds, from which
all payments will be made These shall relate to the Programme expenditure on road works.  No
other administrative expenditures (such as purchase of vehicles and office equipment) shall be
debitable to this account.

18.4     The Programme expenditure will be regulated as follows:

18.4.1. There will not be separate bank accounts of PIUs for Programme expenditure.  As
indicated in Para  12.1 above, the Executive Engineers of PIUs / Heads of PIUs (who are the
drawing and disbursing officers of the PIU) will be declared  as the ex-officio members of the
Agency, so as to enable them to draw on the funds of the Agency from the Programme Account.
They shall be the Authorised signatories for issuing cheques.

18.4.2  The Agency would nominate one of its senior officers, normally the Finance Controller,
or an officer not below the rank of a Chief Engineer, as the Empowered Officer.  It shall be
open only to the Empowered Officer to inform the Bank of the names of Authorised Signatories,
for issuing cheques on the Agency’s bank account.

18.4.3  The Empowered Officer will furnish this list of Authorised Signatories (Executive
Engineers of Districts / Heads of PIUs) to the Bank, apart from himself maintaining a record of
it.  This list will be periodically verified to ensure its accuracy. The Bank will issue separate 
Cheque Books to each of the Authorised Signatories, and will keep their signatures on record.

18.4.4  The Empowered Officer will also inform the Bank of the names of Authorised Payees
(contractors and suppliers with whom Agreements have been duly entered into, as well as
Statutory Authorities, such as ITO etc) and their designated payee accounts, and also the
amounts that are admissible against each of the Contractors and suppliers. This will be in
conformity with the Work Agreements. The Empowered Officer may lay down suitable limits on
monthly payments in line with the agreed Works Programme for the respective packages. 
Standing instructions will be issued to the Bank Branches by the Empowered Officer in this
regard.

18.4.5  The Authorised Signatories will make payments, as per the established procedure, by
Account Payee cheque mentioning the designated payee accounts.  They will  immediately enter
the cheque and payee details in the Payment Module of the OMMS. 

18.4.6  On presentation of the cheque, the Bank would satisfy itself that the payment details have
been entered in the Payment Module, and that the cheque meets with all other requirements,
among others, like signatures agreeing with specimen signatures, the cheque amount being
within the balance authorised limit, and the payee being the authorised payee, payee account
details being fully and correctly specified etc.

18.4.7  The Bank will not allow the funds to be used by any person other than the authorised
signatories and for any purpose other than the authorised payment for Works taken up under the
PMGSY. Nor will it be open to the State level Agency to invest these funds in any other Bank /
Branch, whether for short or medium term, including under Fixed Deposits.   

 
18.4.8 The Bank will render monthly account, in respect of PMGSY Funds, to the PIU, the State
level Agency and the National Rural Roads Development Agency  .

18.4.9 A tripartite Memorandum of Understanding will be entered into between the Bank, State-
level Agency and the Ministry of Rural Development wherein the parties would agree to abide
by the provisions of the Guidelines. In particular, the Bank will agree to abide by the instructions
issued, from time to time, by the Ministry of Rural Development /National Rural Roads
Development Agency (NRRDA) regarding the operation of the Account.

18.5     The NRRDA may, from time to time, issue such directives as necessary for smooth flow
of funds and effectiveness of the Programme.

18.6     The Accounting System to be prescribed by the NRRDA, which would be largely based
on the well-established Accounting system of the Works Departments, would be utilised for this
Programme.

18.7     Money accruing as Interest will be added to the PMGSY funds. The expenditure out of
this interest amount will be guided by the instructions / guidelines to be issued by the Ministry of
Rural Development / NRRDA from time to time.   The Bank shall intimate to the State level
Agency as well as NRRDA, the interest amount credited by it to the Account from time to time.

19        Procedure for Release Of Funds to the State level Agency

19.1     Since the PMGSY has adopted a Project approach where road works have to be
completed within a stipulated time-limit, the cost of the projects cleared for a State for each
Phase of the PMGSY will be made available to the State level Agency in suitable instalments
(upto four instalments).

19.2     The first instalment in a particular year amounting to 25% of the value of projects cleared
by the Ministry shall be released after the project has been cleared by the Ministry and the
release of remaining instalments would be subject to utilisation of 60% of the total available
funds as well as completion of at least 80% of the road works upto the (but not including) the
year previous to the current year and fulfilment of other conditions, if any, stipulated while
releasing the previous instalment.  Total available funds will be the funds available (including
interest accrued)  with the State-level Agency at the time of the release of the previous instalment
/ plus the amount of the previous instalment.

19.3     For release of every instalment (except the first ), conditions prescribed at A and B below
will require to be met while those at C and D are one-time conditions to be met. The Conditions
are as follows:

A.           Utilisation Certificate for the Funds released earlier. The Utilisation Certificate shall be
in the form prescribed.

B.           A Certificate by the Bank Manager, indicating the balance amount on the date of issue
of the Certificate (this should tally with the on-line data).

C.           A Certificate that works which were sanctioned more than two years earlier have been
duly completed and the funds released for such works have also been fully utilised. 

D.           For all releases after October of every year, production of an Audited Statement of
Accounts and a Balance Sheet, duly certified by a Chartered Accountant for the accounts of the
previous financial year.

19.4     For the purpose of releasing funds, the State would be the Unit.

20        Audit

20.1     The State level Agency will ensure that the accounts are audited by a chartered
accountant of standing within six months of the close of the financial year.  This account will be
supported by a statement of reconciliation with the accounts of PIUs and a certificate of
Chartered Accountant on its accuracy.

20.2     In addition to the Audit by the Chartered Accountant, the works under this Programme
would be subject to audit by the Office of the Comptroller and Auditor-General of India
(C&AG). The Audit of the work done by the C&AG may cover aspects of quality, in addition to
financial audit.

 
20.3     Both the State level Agency and the PIUs must provide all information to District level
Vigilance and Monitoring Committees and the Panchayati Raj Institutions.

21        Miscellaneous

21.1     The National Rural Roads Development Agency (NRRDA) will designate reputed
Technical and Research Institutions such as the Indian Institutes of Technology as Principal
Technical Agencies, to provide technical support and to take up research projects, study and
evaluate different technologies and advise on measures to improve the quality and cost norms of
Rural Roads

21.2     Within 15 days of the date of Work Order or at the time of laying of the Foundation
Stone for a road work (whichever is earlier), the Signboards along with the Logo of the PMGSY
should be erected at the site of road works. The Signboards should indicate the name of the
Programme (PMGSY), name of the road, its length, estimated cost, date of commencement and
completion of construction, name of the executing contractor and the Panchayati Raj Institution
maintaining it.  It is desirable that this is in the form of a permanent brick-masonry/ concrete
structure at both ends of the road

21.3     The National Rural Road Development Agency  may, in co-operation with the State level
Agency,  organise suitable Training Programmes for the PIU personnel.

21.4   Planting of fruit bearing and other suitable trees, on both sides of the roads would be taken
up by the State Governments / UT Administration from their own funds.

21.5     The Ministry of Rural Development may, from time to time, issue such directions as may
be necessary for smooth implementation of the Programme. 

22        Convergence

22.1     Rural connectivity is not an end in itself.  It is a means.  It is expected that the
connectivity will improve indicators of education, health, rural incomes etc., provided as a
follow up, and in consultation with the local Panchayati Raj Institutions, convergence is achieved
with other ongoing Programmes in these sectors.  It is expected that the District Panchayat will
focus on these issues.  Before the start of work on Rural Roads, the bench mark indicators may
be measured and attached to the detailed project report.

22.2     The NRRDA will provide 100% assistance for independent Studies to establish the
impact of the new rural connectivity in a District from time to time.