ADB Provides $200 Million to Upgrade Rural Roads in Maharashtra

The Asian Development Bank (ADB) has approved a loan of $200 million to upgrade rural roads to all-weather standards in 34 districts of India’s Maharashtra State to better connect rural areas with markets and services.

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“The upgraded roads under the ADB project will boost links between local residents, productive agricultural land, and economic centers across the state,” said ADB Principal Portfolio Management Specialist Mr. Sanath Ranawana. “Improving farmers’ access to markets will in turn help boost agricultural productivity and incomes as well as promote investment in agribusiness and agriculture value chain infrastructure.”

Maharashtra accounted for almost 15% of India’s gross domestic product in fiscal year (FY) 2017, the biggest share among India’s states. However, economic development is concentrated around the urban centers of Mumbai, Pune, and Thane. There are imbalances in human development across districts while income inequality is one of the highest among all states in India. About 20 million people, or 17% of the state’s population, still live below the national poverty line, while in some districts—particularly in rural areas—it is as high as 40%.

Agriculture accounts for about 47% of employment, engages as much as 79% of the rural labor force, and contributes 11% to the state gross domestic product. However, this contribution is falling. Farmers face persistent crop losses due to the variable climate and limited access to processing and storage facilities, resulting in high levels of debts and even farmer suicides.

Maharashtra has an extensive road network, with rural roads making up two thirds of the network. But more than half of these rural roads are unsealed, making them unsuitable for motorized traffic and impassable during the rainy season. Road safety has also been a growing concern, with the state accounting for more than 8% of all fatal road accidents in India.

ADB has previously supported rural road development in several South Asian countries. The project will build on their experience to upgrade 2,100 kilometers of rural roads to all-weather standards, including contractual maintenance for 5 years following construction. Road designs will incorporate climate resilient features such as improved drainage and higher surface elevations, and stronger embankments, and safety features such as signage, guard posts, and speed breakers. Environmentally friendly sealing options such as asphalt blended with plastic waste will be piloted on selected road segments.

The project will also work with the rural infrastructure agency, the Maharashtra Rural Road Development Association (MRRDA), to develop road safety, road asset management, contract management, and climate resilient design. Accompanying the loan is a technical assistance grant of $1 million to support MRRDA to improve its management performance in these areas. Outreach for road users will be carried out in the state to build awareness of road safety, gender issues including human trafficking, and enhancing women’s road construction and maintenance skills.

The total cost of the project is $296 million, of which the government will provide $96 million. It is due for completion at the end of September 2024.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.

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