Rural Roads

INTRODUCTION 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. 1999) 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.