Policy Update
Shivchaitanya Mahajan
The Pradhan Mantri Gram Sadak Yojana (PMGSY) stands as one of the largest rural infrastructure initiatives in India which was launched on December 25, 2000. The study presents a detailed analysis of the PMGSY’s past, financial patterns, implementation challenges, performance indicators, and socio-economic impact over the past two decades.
Since its launch, PMGSY has connected nearly 1,92,812 habitations and constructed more than 7,75,830 km of all-weather roads (99.5% of the target). The broad ramifications of PMGSY are stronger economic growth, healthier social indicators and rural connectivity. But challenges remain regarding maintenance of roads, operational efficiency, geographical factors, and participation.
In the 2025 annual financial document government has sanctioned PMGSY-IV (2024-29) for ₹70,125 crores for a new 62,500 km roads gives renewed emphasis on rural connectivity while providing over 40 crore human-days of employment. This report highlights PMGSY’s crucial role in realizing India’s vision of inclusive development and supports targeted interventions that allows for maximum leverage in PMGSY.
Background and Evolution
As part of India’s multidimensional poverty reduction program for rural areas, the Pradhan Mantri Gram Sadak Yojana was developed to cover villages above 500 people in the plains and above 250 people in hilly/tribal areas. In its journey, PMGSY has had multiple phases:
Figure 1: Evolution of PMGSY (2000-2029)
PMGSY-I (2000): Provided new connectivity to previously unconnected habitations PMGSY-II (2013): Supported improvement of existing rural roads for more durability and use PMGSY-III (2019): Created integrated rural road networks to connect to local markets, medical care, schools and other basic services. PMGSY-IV (2025-29): Approved to connect the remaining 25,000 habitations which were not previously connected by 62,500 km of all-weather roads. The phases were sequential and show responsiveness to rural infrastructure needs evolving from connectivity to improve quality, and now into connection to a multi-sector development.
Implementation Framework
PMGSY functions through a decentralized framework with multiple stakeholders:
Figure 2: PMGSY Implementation Framework and Stakeholder Relationships
Ministry of Rural Development: Serves as the nodal ministry giving policy guidance National Rural Infrastructure Development Agency (NRIDA): Offers technical and management assistance State-level agencies: Execute projects with technical guidance Local governance (Panchayati Raj institutions): Involved in planning and monitoring
Planning and Approval Process
Planning Phase: District Rural Development Agencies prepare Core Network maps of eligible habitations
Technical Scrutiny: State Technical Agencies scrutinize project proposals
Approval Mechanism: State Level Standing Committees approve prior to final clearance by Ministry of Rural Development
Implementation: Construction according to Indian Road Congress standards with quality checks.
Figure 3: PMGSY Key Achievement Metrics (2000-2024)
Funding Structure
The funding structure has been transformed from 100% central funding to a shared model:
Figure 4: Current PMGSY Funding Structure
General states: 60% Central share, 40% State share Special category states (North-Eastern and Himalayan): 90% Central share, 10% State share
Performance Analysis
Budget Allocation Trends
Budget allocations mirror the government’s priority for rural connectivity:
Figure 5: PMGSY Budget Allocation Trends (FY 2021-22 to FY 2025-26)
FY 2021-22: ₹15,000 crore FY 2022-23: ₹14,000 crore FY 2023-24: ₹12,000 crore FY 2024-25: ₹14,500 crore FY 2025-26: ₹19,000 crore (31% more compared to last year)
Cumulative Achievement
PMGSY has achieved the following as of March 2024:
Figure 6: PMGSY Phase-wise Completion Status
Total habitations connected: 1,92,812 (99.5% of target) Total road length constructed: 7,75,830 km
- PMGSY-I: 6,48,938 km (99.8% completion)
- PMGSY-II: 46,468 km (93.2% completion)
- PMGSY-III: 36,274 km (55.8% completion)
Regional Disparities
State-wise performance is found to vary considerably:
Figure 7: Comparison of Road Construction by Top Performing and Backward States (FY 2023-24)
Top Performing States (FY 2023-24):
- Uttar Pradesh: 5,872 km
- Madhya Pradesh: 5,126 km
- Rajasthan: 4,950 km
- Bihar: 4,785 km
- Maharashtra: 3,987 km
Backward States (FY 2023-24):
- Sikkim: 121 km
- Manipur: 243 km
- Nagaland: 267 km
- Mizoram: 289 km
- Tripura: 342 km
Uttar Pradesh, Madhya Pradesh, Rajasthan, and Bihar are example states that enjoy favorable topography which contains wide plains and plateaus making logistics easier, while their bigger population and economic activities themselves create the need for and justification of extensive road networks which is also economically beneficial. This serves as a self-sustaining cycle where the improved connectivity in Maharashtra and Uttar Pradesh enhances economic activity, which in turn encourages additional infrastructure investment due to higher tax revenue and government focus.
the lagging northeastern states of Sikkim, Manipur, Nagaland, Mizoram, and Tripura face a compound challenge where difficult mountainous terrain exponentially increases construction costs and timelines, while their smaller populations and economies provide less economic justification for equivalent per-kilometer investment. The principle of economies of scale works against Sikkim and Manipur especially, as the fixed costs of mobilizing construction equipment and expertise cannot be distributed across larger projects. This creates an infrastructure development paradox where states like Nagaland and Mizoram potentially needing improved connectivity the most to boost economic development face the greatest barriers to achieving it, requiring specialized policy interventions that acknowledge these fundamental geographic and economic realities.
Implementation Efficiency
Alarming is the decreasing pace of road construction:
Figure 8: Decline in Daily Road Construction Rate (2016-17 vs 2023-24)
2016-17: 133 km/day
2023-24: 82 km/day
This 38% decrease in construction speed identifies potential implementation roadblocks requiring action.
Impact Assessment
PMGSY has sparked transformational changes in several dimensions:
Figure 9: Multi-dimensional Impact of PMGSY on Rural India
Economic Impact
- 8-10% boost in farm productivity in linked habitations
- 12-15% decline in transport expenses for agricultural produce
- 20% expansion in rural business market access
- Improved livelihood opportunities through better access to markets
Social Impact
- 15% increase in school enrollment levels
- 23% increase in access to health facilities
- 18% decline in maternal mortality in remote locations
- 25% increase in female workers in the workforce
Employment Generation
- PMGSY-IV will generate more than 40 crore human-days of employment
- Local employment during construction and maintenance operations
- Upgradation of rural construction sector skills
Challenges and Emerging Issues
Regardless of notable success, a number of challenges hinder the program’s potential:
Figure 10: Critical Challenges Facing PMGSY Implementation
Maintenance Deficit
Much of the constructed road network corrodes prematurely from a lack of maintenance funding and ambiguous responsibility placement between state and local governments.
Operational Inefficiencies
Problems such as manual entry of data, slow release of funds, and poor transparency mechanism discourage program effectiveness.
Geographical Barriers
Northeast states have major challenges in implementation stemming from rugged terrain, short working seasons, and logistics limitations.
Limited Community Participation
Lack of participation by local communities in planning and monitoring weakens accountability and local ownership.
Challenges in Land Acquisitions
Retardation of land acquisition activities hinders on-time execution of projects in most areas.
Technological and Environmental Innovations
PMGSY-IV has a number of futuristic features:
Figure 11: Technological and Environmental Innovations in PMGSY-IV
- Geographic Information System (GIS)-based digital mapping
- Alignment with PM Gati Shakti National Master Plan for integrated planning
- Green technologies such as waste plastic, cold mix technology, and cell-filled concrete
- Eco-friendly materials such as steel slag and fly ash to minimize environmental footprint
Recommendations
Figure 12: Strategic Intervention Framework for PMGSY Enhancement
Strategic Interventions
Guarantee sustained infrastructure quality through special maintenance funds with localized and state defined boundaries of governance. Defined funding methods will ensure that sustained quality is maintained through proper delineation of governance levels and accountability will be provided on different layers of governance. For unobstructed tracking of unlimited financial changes at all transaction stages at all levels of execution, adoption of automated solutions for improved transparency and fund usage will be implemented.
Split geographic regions and tailor plans with more flexibility for severe terrain regions as challenging geography requires different treatments instead of a single one. Capture and enhance local governance by expanding member participation in initiating, overseeing, or maintaining the projects further deepens community governance while ensuring better project success and reduces overdependence on external technologies. Transform compensation policies to mitigate chronic issues causing slow infrastructural advancement by legally streamlining land ownership alteration procedures to ensure appropriate consideration for provided services.
Policy Directions
Make rural development program integration more purposeful to maximize synergies, creating a unified holistic system that utilizes infrastructure development to improve education, healthcare, and economic growth. Build strong and comprehensive monitoring frameworks using advanced technologies such as drones or GIS-based systems which enable precise, quality-driven monitoring to uncover construction and compliance issues before they become cost-inefficient problems. Foster a complete skill-building approach for local contractors and maintenance personnel which equips them with essential technical and managerial problem-solving skills fundamental to construction quality and ongoing maintenance.
Loosen high development potential coverage criteria to lower habitations with strong economic growth potential disregarding population thresholds in existing guidelines, especially those with tourism, agricultural, traditional crafts, and other potentials. Promote resilient infrastructure construction for regions sensitive to climate change while supporting reduced environmental footprint from eco-friendly materials, energy-efficient designs, low habitat disruption construction, and resource-efficient methods.
Conclusion
Figure 13: PMGSY’s Contribution to India’s Development Vision
As India marches toward being a $5 trillion economy, PMGSY remains an important tool for inclusive growth. The scheme is a model of how focused development of infrastructure can spur multidimensional development results in rural India.
The recent increase in allocation in Budget 2025-26 and the announcement of PMGSY-IV reflect the government’s intent to finish “the last mile” of rural connectivity. But to achieve the program’s full potential, it is necessary to overcome ongoing challenges in maintenance, operational efficiency, regional disparities, and community engagement.
Through strategic interventions and policy innovations, PMGSY can further speed up rural transformation and make a substantial contribution to the vision of a developed and connected India.
References
- Ministry of Rural Development. (2024). Cabinet approves implementation of PMGSY-IV during FY 2024-25 to 2028-29. https://rural.gov.in/en/press-release/cabinet-approves-implementation-pradhan-mantri-gram-sadak-yojana-iv-pmgsy-iv-during-fy
- CNBC TV18. (2025). Budget 2025: Pradhan Mantri Gram Sadak Yojana receives ₹19,000 cr allocation. https://www.cnbctv18.com/economy/budget-2025-pradhan-mantri-gram-sadak-yojana-receives-rs-19000-cr-allocation-19551093.htm
- Press Information Bureau. (2022). PMGSY Performance Update. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1806271
- PMGSY Online Management, Monitoring and Accounting System. (2024). Progress Reports. https://omms.nic.in
- MicroSave Consulting. (2024). Overcoming the Roadblocks in India’s Rural Road Connectivity Program. https://www.microsave.net/2024/04/15/overcoming-the-roadblocks-in-indias-rural-road-connectivity-program/
- PMGSY. (2024). Selected Case Studies. https://pmgsy.nic.in/selected-case-studies
- PMGSY. (2022). Impact Assessment Studies. https://pmgsy.nic.in/impact-assessment-pmgsy
- PMGSY. (2023). Annual Reports. https://pmgsy.nic.in/annual_reports
- PRS India. (2024). Budget Analysis 2025-26: Rural Development. https://prsindia.org/files/budget/budget_parliament/2025/DFG_Analysis_2025-26_Rural_Development.pdf
About the Contributor: Shivchaitanya is currently a Research Intern at the Impact and Policy Research Institute (IMPRI). He is pursuing a Master of Science in Economics at Symbiosis School of Economics, Pune.
Acknowledgment: The contributor gratefully acknowledges the guidance and support provided by Team IMPRI throughout the course of this work.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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