Rural Road connectivity is a key component of rural development, since it promotes access to
economic and social services, thereby generating increased agricultural productivity, non-agriculture
employment as well as non-agricultural productivity, which in turn expands rural growth
opportunities and real income through which poverty can be reduced.
A study (Fan et al. 2006) carried out by the International Food Policy Research Institute on
linkages between government expenditure and poverty in rural India has revealed that an
investment of Rs 1 crore in roads lifts 1650 poor persons above the poverty line. Public investment
on roads impacts rural poverty through its effect on improved agricultural productivity, higher non-
farm employment opportunities and increased rural wages. Improvement in agricultural productivity
not only reduces rural poverty directly by increasing income of poor households, it also causes
decline in poverty indirectly by raising agricultural wages and lowering food prices (since poor
households are net buyers of foodgrains). Similarly, increased non-farm employment and higher
rural wages also enhance incomes of the rural poor and consequently, reduce rural poverty. This
study estimated that while the ‘productivity effect’ of government spending on rural roads accounts
for 24 per cent of total impact on poverty, increased non-farm employment accounts for 55 per cent
and higher rural wages accounts for the remaining 31 per cent. Further, of the total productivity
effect on poverty, 75 per cent arises from the direct impact of roads in increasing incomes, while the
remaining 25 per cent arises from lower food prices (15 per cent) and increased wages (10 per cent).
Similar results are found in other developing countries. The study by the same institute (Fan et al.
2000)) in China revealed that with every 10,000 Yuan (about $1200) spent on rural roads eleven
persons are lifted above the poverty line. Living Standard Survey in Vietnam in 2002 showed that
populations living within 2 km of all-weather roads have lower poverty rates as noted in the draft
Vision Document for Rural Roads, 2006 (MoRD, 2006). Statistical evidence apart, the link between
poverty and lack of accessibility is quite apparent. Nearer home, a household survey (APERP, 1997)
conducted in the state of Andhra Pradesh indicated that the rural road improvements lead to
substantial reduction in freight charges, increase in household income, more employment
opportunities, and expansion of cultivated land as shown in Figures 5.1, 5.2, and 5.3.
STATUS OF RURAL ROADS IN INDIA
Roads are classified under a time-honoured system into National Highways (NHs), State Highways
(SHs), Major District Roads (MDRs), Other District Roads (ODRs), and Village Roads (VRs), with well-
recognized standards for construction and maintenance laid out in respect of each category.
Generally speaking, there are clearly understood demarcations of responsibility in terms of
governmental offices expected to deal with each category. However, while the activity mapping with
respect to NHs and SHs is clear cut, with respect to MDRs, ODRs, and VRs, these distinctions are
blurred. In many states, though PRIs are assigned responsibilities with respect to ODRs and VRs, a
plethora of agencies and line departments undertake formation and repairs of roads. These include
the state government’s PWD wing, the Agricultural Produce Marketing Committees (APMCs),
parallel bodies created by multilateral agencies, Forest department, Development authorities and so
There are several general funds that are used for roads,
apart from special schemes tied to specific road projects.