BUDGET BRIEFS

Volume 9, Issue 7

Pradhan Mantri Gram Sadak Yojana (PMGSY)

GOI, 2017-18
The Pradhan Mantri Gram Sadak
HIGHLIGHTS

₹1,07,758 cr ₹19,000 cr
Yojana (PMGSY) was launched
by the Government of India (GOI)
on 25 December, 2000 to provide
GOI allocations for MORD in GOI allocations for PMGSY in
all-weather road connectivity in FY 2017-18 FY 2017-18
rural areas. PMGSY is administered
by the Ministry of Rural Develop-
ment (MORD). Using government
data, this brief reports on PMGSY SUMMARY & ANALYSIS
progress along the following param- ■ In FY 2016-17, as of 25 January, 2017, projects worth `23,201 crore: 122 per
eters:
cent of the GOI allocations for FY 2016-17 (revised estimates/RE) had been
l Overall trends in allocations and
approved by MORD.
expenditures
l Trends in sanction of projects
■ Between FY 2000-01 and 25 January, 2017, 85 per cent of sanctioned projects
l State-wise progress on road
had been completed, 9 per cent were in progress, 2 per cent had been
works completed contracted out, and 4 per cent were yet to be contracted.
l Overall progress in ensuring rural ■ About 8 per cent of completed projects from FY 2007-08 to FY 2016-17 were
connectivity yet to receive full payment as of 25 January, 2017. Delayed payments were
Cost share and implementation: high in states such as Jammu and Kashmir (75 per cent), Tripura (30 per
PMGSY was a 100 per cent GOI cent), Jharkhand (27 per cent) and Bihar (20 per cent).
funded Centrally Sponsored Scheme ■ Physical construction often exceeds the 12-month timeframe laid down
till FY 2014-15. From FY 2015-16, the
in PMGSY guidelines. Only 24 per cent of projects completed between FY
sharing ratio has been revised, with
GOI providing 60 per cent and states
2000-01 to FY 2015-16 had been completed within a year of the contracting
providing 40 per cent of the funds. agreement being signed.
For the North East and hilly states ■ Between FY 2000-01 and 25 January, 2017, 1.54 lakh new projects had been
the funding ratio is 90:10. 50 per approved and 4.87 lakh kilometer (km) of roads had been newly constructed
cent of the cess on high-speed diesel
or upgraded under the scheme. This amounts to an average of 80 km
is earmarked for the programme.
constructed per day.
Real-time data on expenditures and
physical progress is available on
■ Between April 2000 and 25 January, 2017, PMGSY has connected 1.9 lakh
the PMGSY’s Online Management, habitations across the country. This amounts to 17 per cent of all habitations.
Monitoring and Accounting System.
All data is as of 25 January, 2017.

Accountability Initiative, Centre for Policy Research, Dharam Marg, Chanakyapuri, New Delhi - 110021
Prepared by: Vikram Srinivas, vsrinivas@accountabilityindia.org & Avani Kapur, akapur@accountabilityindia.org
Special thanks: Aatmik Gupta
TRENDS IN GOI ALLOCATIONS AND EXPENDITURES FOR PMGSY
■ The Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched on 25 December, 2000 as a 100 per cent GOI
funded Centrally Sponsored Scheme (CSS) to provide all-weather road connectivity in rural areas. From FY 2015-
16, the sharing ratio has been revised, with GOI providing 60 per cent and states providing 40 per cent of the
funds. For the North East and hilly states the funding ratio is 90:10.
■ The scheme is being run by the Ministry of Rural Development (MORD) and envisages connecting all habitations
with more than 500 residents in the plains, and more than 250 residents in hilly, tribal and desert areas. Whilst
the first phase, still running, focuses on new construction and upgradation of roads, the second phase focuses on
upgradation of existing roads based on their economic potential.
Allocations
■ PMGSY allocations increased sharply post 2005, when the scheme was included in GOI’s flagship ‘Bharat Nirman’
programme. Between FY 2004-05 and FY 2010-11, allocations increased from `2,219 crore to `19,886 crore.
Allocations, however, fell sharply between FY 2011-12 and FY 2013-14. In FY 2014-15, allocations rose again and
in FY 2017-18 budget estimates (BE), `19,000 crore was allocated to PMGSY. This allocation remains unchanged
from FY 2016-17 RE.

PMGSY ALLOCATIONS FOR 2017-18 REMAIN UNCHANGED FROM 2016-17

25,000

19,886
19,000
20,000 18,198 18,297 19,000

14,200
15,000

10,285
9,100 9,347
10,000
7,225
6,110
5,103
5,000
3,836
2,500 2,500 2,230 2,090 2,219

-
08

13

6
01

7
10

12
11
7

E)
02

15
5

-0

1
0

1
-0

-1
0

5-
-

2-

3-

5-

6-

(B
-

-
-
-

-
4-

07

08

12
00

09

11
10
06

13
01

14

1
0

1
0

18
20

20

20

20
20

20

20

20

20
20

20
20
20

20
20

20
20

-
17
20

GOI allocations (` crore)

Source: India Expenditure Budget, Vol 2, Department of Rural Development. Available online at: http://indiabudget.nic.in. Note: Figures
are in crore of rupees and are RE, except for FY 2017-18 which are BE. Last accessed on 1 February, 2017.

Expenditures
■ Expenditures under the scheme have always been high. Out of a total allocation of `1.52 lakh crore since FY 2000-
01, `1.48 lakh crore has been spent as of 25 January, 2017.
■ Actual expenditures exceeded budget allocations for four of the seven years for which audited expenditure data
is available.

2 ACCOUNTABILITY INITIATIVE, INDIA

 PMGSY EXPENDITURES HAVE REMAINED CONSISTENTLY HIGH
120% 110 113
106 105
98 100 100
100%

80%

60%

40%

20%

0%
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Percentage spent out of GOI allocations

Source: India Expenditure Budget, Vol 2, Department of Rural Development. Available online at: http://indiabudget.nic.in.
Note: Alllocations are RE and expenditures are Actuals. Last accessed on 1 February, 2017.

PLANNING PROCESS OF PMGSY

■ At the start of the programme in 2000, PMGSY identified a core network of roads which were required to provide
access to all rural habitations in the country. Based on gaps identified, districts prepare District Rural Road Plans.
These are then transmitted to state societies known as State Rural Roads Development Authorities (RRDA). Once
collated, these plans are submitted to the national RRDA which is responsible for evaluating and approving
proposals.
■ There is often a mismatch between the value of projects sanctioned in a given year and the total budgetary
allocations for that year. For instance, in FY 2004-05, whilst the budget allocation stood at `2,219 crore, plans
worth `4,452 crore were sanctioned. Similarly, in FY 2008-09, sanctioned plans were almost five times budgetary
allocations.
■ It is, however, important to note that this gap is taken into account in the allocations for subsequent years. Periods
where sanctions exceed allocations are followed by periods where fewer new projects are sanctioned. Instead,
budgetary allocations are used to complete previously sanctioned projects. For example, following the peak
in new projects approved in FY 2008-09, the next three financial years saw a decrease, with only 39 per cent of
budgetary allocations used for new projects.

PROJECT SANCTIONS OFTEN EXCEED BUDGET ALLOCATIONS

500% 483
450%
397 399
400%

350% 333
317
300% 283
259
250% 201
204
200%

150% 122
102
100%
37 57
50% 55 14 17 18
0%

New projects sanctioned as a percentage of budget allocations

Source: PMGSY Online Management, Monitoring and Accounting System, Proposals. Available online at: omms.nic.in. India Expenditure
Budget, Vol 2, Department of Rural Development. Available online at: http://indiabudget.nic.in.
Note: Allocations are RE. Last accessed on 1 February, 2017.
BUDGET BRIEFS, PMGSY, GOI 2017-18, VOL 9/ISSUE 7 3
■ In FY 2016-17, as of 25 January, 2017, projects worth `23,201 crore – 122 per cent of GOI allocations for FY 2016-17 –
had been approved by MORD.
■ However, 44 per cent of proposals for the year have not yet been sanctioned as of January 2017. Whilst Madhya
Pradesh, Gujarat, Mizoram, Tamil Nadu and Rajasthan had nearly all their proposals approved, four states –Goa,
Manipur, Punjab and Telangana – have had no projects sanctioned for FY 2016-17 (till 25 January, 2017).
■ Approval was pending for more than half of the projects in West Bengal, Assam, Jharkhand, Himachal Pradesh
and Uttarakhand.
ALL PROPOSALS FOR 2016-17 PENDING FOR 4 STATES
100%

80%

60%
67
91 26
96
100 62
86 25
40%

63

49 47
20% 42 38 39
33 32 29 12
24
19
9 10 2
4 2 2 1 1 1 1 0
0% 0 1 0 0 0

Percentage of 2016-17 proposals pending at State level Percentage of 2016-17 proposals pending with MORD

Source: PMGSY Online Management, Monitoring and Accounting System, Proposals. Available online at: omms.nic.in. Last accessed
on 25 January, 2017.

EXECUTION OF PMGSY
■ PMGSY guidelines define specific timelines for tendering contracts and completion of works. According to the
guidelines, the gap between approval of a project and contracting out the project should be less than 75 days.
Moreover, construction of works should be completed within 12 months from the issue of the work order. This
section reports on the physical status of works under the first phase of PMGSY.
■ Construction of roads under PMGSY is often delayed. Between FY 2000-01 and FY 2016-17 (till January 2017), 85
per cent of sanctioned projects had been completed, 9 per cent were in progress, 2 per cent had been contracted
out but not yet started, and 4 per cent were yet to be contracted.
■ Most projects where physical work was yet to begin as of 25 January, 2017 were sanctioned in FY 2015-16 or FY
2016-17. In contrast, 82 per cent of projects where physical progress was ongoing had been sanctioned in FY 2014-
15 or earlier.
■ As of January 2017, only 3 per cent of projects sanctioned in FY 2015-16 had been completed, as compared to 62 per
cent and 47 per cent of projects sanctioned in FY 2013-14 and FY 2014-15, respectively.

4 ACCOUNTABILITY INITIATIVE, INDIA

 38% WORKS SANCTIONED IN 2013-14 ARE YET TO BE COMPLETED
100% 3
13

80%
47
62 32

60% 80 71
84
90 89
98 97 94
100 100 100 100 99 99

40%

47
55
20% 33
19
20 15
10 11 3 3
2 3 6 2 4 7
0%
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Percentage of works with agreement pending Percentage of works with agreement signed
Percentage of works in progress Percentage of works completed

Source: PMGSY Online Management, Monitoring and Accounting System, Road-wise progress of work. Available online at: omms.nic.
in. Last accessed on 25 January, 2017.

Tendering
■ A majority of PMGSY projects experience delays during the contracting process. 65 per cent of projects sanctioned
between FY 2000-01 to FY 2015-16 had signed contracts only after the end of that financial year.

LESS THAN 50% OF SANCTIONED WORKS ARE CONTRACTED OUT IN MOST YEARS

100% 95
88
82
78
80% 74

65 65 64 64
61 61 60
59 59
60% 55
48

40%

20%

0%
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Percentage of works not contracted out within financial year

Source: PMGSY Online Management, Monitoring and Accounting System, Roadwise progress of work. Available online at: omms.nic.
in. Last accessed on 16 January, 2017.

BUDGET BRIEFS, PMGSY, GOI 2017-18, VOL 9/ISSUE 7 5

Construction
■ Time for physical construction often exceeds the 12-month timeframe laid down in the guidelines. Only 24 per
cent of projects completed between FY 2000-01 and FY 2015-16 had been finished within a year of the contracting
agreement being signed.
■ Time taken to complete projects was longest between FY 2008-09 and FY 2010-11 when the average project took
nearly two years to complete. As mentioned earlier, a significant proportion of the projects sanctioned after FY
2012-13 are still in progress.

PROJECTS SANCTIONED BETWEEN 2008 AND 2011 TOOK NEARLY

2 YEARS TO COMPLETE AFTER CONTRACTING
1,000

899
900

800 745 757

674 654
700 669 668 655 647 651
593 580
600

474
500

374
400

359
300 240

200
124
100

0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Average number of days to complete work after contract

Source: PMGSY Online Management, Monitoring and Accounting System, Roadwise progress of work. Available online at: omms.nic.
in. Last accessed on 16 January, 2017.

Payment
■ About 8 per cent of completed projects in the past 10 financial years, from FY 2007-08 to 2016-17 (till 25 January),
are yet to receive full payment.
■ There are significant state-wise variations. While less than 2 per cent of payments were delayed in Uttar Pradesh
and Chhattisgarh, delayed payments were high in states such as Jammu and Kashmir (75 per cent), Tripura (30 per
cent), Jharkhand (27 per cent) and Bihar (20 per cent).

6 ACCOUNTABILITY INITIATIVE, INDIA

 75% OF COMPLETED WORKS IN JAMMU AND KASHMIR ARE PENDING PAYMENT
100%

80% 75

60%

40%
30
27
20
20% 17 16
11 10 9 9 8 7 7 6 6

0%

Percentage of completed works pending payment

Source: PMGSY Online Management, Monitoring and Accounting System, Final Bill Payments. Available online at: omms.nic.in. Last
accessed on 16 January, 2017.

OUTPUTS
Road Construction
■ Between FY 2000-01 and 25 January, 2017, 1.54 lakh projects had been approved and 4.87 lakh km of roads had
been newly constructed or upgraded under the scheme. This amounts to an average of about 80 km per day. 70
per cent of road length had been built since 1 April, 2009.
■ Construction under PMGSY has been concentrated in a few states. Six states – Madhya Pradesh, Rajasthan,
Uttar Pradesh, Bihar, Odisha and Chhattisgarh – accounted for 58 per cent of the total completed road length till
January 2017.

58% OF CONSTRUCTED ROAD LENGTH IS IN 6 STATES

Chhatt-
Madhya Pradesh Rajasthan Uttar Pradesh Bihar Odisha Others
isgarh
13 12 10 8 8 42
6

0% 20% 40% 60% 80% 100%

Madhya Pradesh Rajasthan Uttar Pradesh Bihar Odisha Chhattisgarh Others

Source: PMGSY Online Management, Monitoring and Accounting System, Roadwise progress of work. Available online at: omms.nic.in.
Note: All figures have been rounded off. Last accessed on 16 January, 2017.

BUDGET BRIEFS, PMGSY, GOI 2017-18, VOL 9/ISSUE 7 7

Coverage
■ As of April 2000, 5.3 lakh habitations, amounting to 48 per cent of all habitations in India, remained unconnected
by roads.
■ Between April 2000 and 25 January, 2017, PMGSY has connected 1.9 lakh habitations across the country. This
amounts to 17 per cent of all habitations.
■ 88 per cent of total habitations connected were in 10 states: Bihar, Rajasthan, Madhya Pradesh, Odisha, West
Bengal, Chhattisgarh, Uttar Pradesh, Assam, Jharkhand and Tripura.
■ There are, however, state variations. The proportion of all habitations connected to the road network by PMGSY
between April 2000 and 25 January, 2017 stood at 44 per cent in Chhattisgarh and 41 per cent in Bihar.
■ In contrast, the proportion of habitations connected by PMGSY in the same period was 5 per cent in Uttar Pradesh
and 11 per cent in Meghalaya. 44 per cent of habitations in Uttar Pradesh and 39 per cent in Meghalaya remain
unconnected to the road network.
■ Schemes administered by state governments had connected an additional 77,975 habitations between April
2000 to 25 January, 2017. This amounts to 7 per cent of all habitations.
■ The total number of unconnected habitations as of 25 January, 2017 stood at 2.6 lakh, or 24 per cent of all
habitations – a reduction of 24 percentage points from April 2000.

PMGSY HAD CONNECTED 17% OF HABITATIONS AS OF 25 JANUARY, 2017

100%
4 4 1
2
10
2 1 3
80%
9
28 25
39 22
41 25 20
60% 38 35 11
44 11
5 5
23 15 1
88 88 92 41
87 1 15
40% 78 5
18 3 19
61 59
49 53 49 49
42 42 5 2
20% 38 37
33 36
26 21 23

0%

Percentage of habitations connected in 2000 Percentage of habitations covered by state schemes

Percentage of habitations covered by PMGSY

Source: PMGSY Online Management, Monitoring and Accounting System, Roadwise progress of work. Available online at: omms.nic.
in. Last accessed on 25 January, 2017.

8 ACCOUNTABILITY INITIATIVE, INDIA