PMGSY: An Evaluation


The Pradhan Mantri Gram Sadak Yojana (PMGSY) is a programme launched by the NDA government on 25th December 2000 for providing all-weather road connectivity to every rural habitation with a minimum population of 500 in the plains and 250-plus in hill states, tribal districts and desert areas. It has completed 15 years. In this article we will analyze whether it has achieved its goals.

Achievements of PMGSY

• The fully centrally-sponsored scheme covered a total of 1,78,184 habitations as per the criteria laid down. The fact that 1,14,540 or 64% of these eligible habitations actually have roads today - with projects being cleared for another 30,501 - can be considered a reasonable achievement .

• Since its inception, PMGSY has provided connectivity of over 4,66,044 km - including up gradation of 1,67,977 km of existing roads - at an aggregate cost of Rs 1,41,822 crore as on January 2016 What is more significant is that The states that have recorded the highest road construction - Madhya Pradesh (63,548 km), followed by Rajasthan (58,462 km), Uttar Pradesh (45,905 km), Bihar (35,510 km) and Odisha (35,019 km) - are the ones which were the least connected at the turn of the century.

• The biggest impact has been on productivity. Once there is connectivity, hitherto isolated hamlets become part of larger clusters of 200-300 villages with 50,000-100,000 consumers, against 1,000-2,000 previously. This allows for economies of scale, specialization and flourishing of micro-enterprises.

• PMGSY has made it possible for producers of perishable produce such as milk, fish and vegetables to sell these to a wider base of consumers. Equally, it has enabled companies to distribute their products through rural retail stores. These stores were earlier unviable both for their owners and the companies wanting to replenish stocks.

• It has transformed many Islands into mainland one prime example of it is Katara village in purnea district which was only accessible through boats PMGSY are integrated the village with road and due to this the villagers of that area has benefitted drastically in all aspects.

• It is a better antidote to poverty than MNREGA as it is better implemented in poorer states like Bihar and Orissa than in Better off states like Tamil Nadu. Which could be seen from the fact that that Bihar, Jharkhand, Odisha, Madhya Pradesh and Uttar Pradesh together accounted for nearly 45 % of the total spending on PMGSY in 2014-15, whereas their corresponding combined share in MGNREGA expenditure was just 25%. 

What factors contributed to success of PMGSY?

• It is one of the rare CSS which has achieved both efficiency and equity targets. The reason for this is that Under the scheme the firm which is given the job of constructing the road is also mandatory given the job of bearing maintenance cost for 1st 5 years this has led to using of better quality materials in building the road as if inferior material is used in constructing the road this would mean higher maintenance cost for the firm. Thus it has ensured that better quality roads are constructed under PMGSY.

• Secondly it did not suffer for lack of funding for most of the time. Initially, it was financed largely through a 50-paise-per-litre cess on diesel, which was raised to 75 paise in the 2003-04 Budget. The UPA, which came to power a year later, did not undermine the programme, despite it being an NDA flagship. On the contrary, it enhanced allocations.

• The reason for better performance of poorer states is that While MGNREGA is supposed to be demand or need-driven, the reality is that it is being successfully implemented only in better-governed states even with lower levels of poverty. In contrast, under PMGSY, state-wise allocations are fixed based on pre-determined gaps in road infrastructure. That automatically ensures more money being released and roads getting built in Bihar rather than in Tamil Nadu or Kerala. 

• PMGSY is less prone to leakage because it is a specific asset-focused programme, unlike MGNREGA that is general dole-based and not amenable to monitoring beyond a point. The rigid labour-material ratio prescriptions under MGREGA also means that the quality of assets created aren't of the standard of roads constructed under PMGSY.


MGNREGA may have a role in mitigating immediate rural distress on account of drought and other unforeseen calamities. But programmes like PMGSY provide more effective long-term poverty alleviation solutions, through raising of overall productivity and expansion of non-farm employment opportunities.