Initial Environmental Examination Project Number: 52328-001 April 2019 Proposed Loan and Technical Assistance Grant India: Maharashtra Rural Connectivity Improvement Project Prepared by the Maharashtra Rural Road Development Association, State Government of Maharashtra, for the Asian Development Bank. This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section on ADB’s website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Currency Equivalents (as of 3 April 2019) Currency unit – Indian Rupee (₹) ₹1.00 = $0. 0.014506 $1.00 = ₹68.932500 ABBREVIATIONS ADB – Asian Development Bank DPR – detailed project report GDP – gross domestic product ha – hectare km – kilometer MMGSY – Mukhya Mantri Gram Sadak Yojana MRRDA – Maharashtra Rural Road Development Association PISC – project implementation support consultant PIU – project implementation unit PMGSY – Pradhan Mantri Gram Sadak Yojana PMU – project management unit SPS – Safeguard Policy Statement, 2009 TA – technical assistance NOTE (i) In this report, “$” refers to United States dollars. CONTENTS I. INTRODUCTION 1 A. Project Background 1 B. IEE Objectives 2 C. Extent of IEE 3 D. Study Approach and Methodology 3 E. Reconnaissance Survey and Initial Consultations 3 F. Primary Data Collection 3 G. Secondary Data Collection 4 H. Public Consultations 4 I. Other Tools, Additional Surveys and Studies 4 J. Assessment of Potential Impacts 4 K. Preparation of the Environment Management Plan 4 L. Structure of IEE Report 4 II. DESCRIPTION OF THE PROJECT 5 A. Project Identification and Location 5 B. Proposed Project 7 C. Project’s environmental category 8 D. Characteristics of existing roads 9 E. Climate Resilient Rural Road Improvement 9 F. Use of Innovative Technologies 10 III. POLICY AND LEGAL FRAMEWORK 10 A. Regulatory Requirements for the Rural Road Upgrading 10 B. Environment Codes of Practices 11 C. Good Environmental Management Practices under the Project 12 D. ADB Safeguard Policy (Safeguards Policy Statement, 2009) 12 E. Safeguards Provisions in the Bidding Documents 13 IV. ENVIRONMENTAL BASELINE 16 A. Geography and Project Administrative Boundary 16 B. Physical Environment 17 C. Flora and Fauna 21 D. Socio-Economic IV-30 V. IMPACT ASSESSMENT AND MITIGATION MEASURES V-33 A. Identification and Assessment of Environmental Impacts V-35 B. Summary of Impacts Assessment and Mitigation measures V-36 VI. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE 62 A. Introduction 62 B. Consultation Method and Information Disclosure 62 C. Participants to the Transect Walk 63 D. Results of Public Consultation 63 E. Information Disclosure 65 F. Public Consultation and Communication Plan for future 65 VII. ENVIRONMENTAL MANAGEMENT PLAN 66 A. Environmental Management Plan 66 B. Environmental Management, Monitoring, and Climate Change Adaptation Costs 66 C. Institutional Setting to Implement the Environmental Safeguards 67 VIII. GRIEVANCE REDRESS MECHANISM 70 A. Grievance Redress Mechanism 70 IX. CONCLUSION AND RECOMMENDATION 73 A. Conclusion 73 I. INTRODUCTION A. Project Background Maharashtra is the second largest state of India in terms of population (estimated at 116 million in 2018) and third largest inland mass (308,000 square kilometers [km2]). Maharashtra is also the most industrialized state, contributing 14.8% of India’s total gross domestic product (GDP) in 2016–2017.1 The rate of economic growth has been above the national average since 2005. Between 2012–2017, Maharashtra’s GDP grew at an average of 7.4% per year, compared to the national average of 6.8% during the same period. Economic growth over the past 5 years is primarily driven by the industrial and service sectors, at an average of 6.1% and 8.8% annual growth rates, respectively. Notwithstanding this, approximately 20 million people still live below the national poverty line of less than $1.90 per day.2 Although the state’s rural poverty rate of 24% is marginally better than the national average of 27%, poverty rates are recorded as high as 40% in some districts. The agriculture sector remains central to Maharashtra’s economic and political landscape. The sector contributes 11% of the Maharashtra’s GDP and accounts for 79% of rural employment. The share of agriculture sector in Maharashtra has been declining in the last three decades, from 21.4% in 1990–1991 down to 12.2 % in 2016–2017. Furthermore, the agriculture sector recorded 2% annual growth during the period, below the national agriculture sector growth rate of 2.6%. This is due to several reasons, including infrastructure gaps in transport which hinder effective links between farms and markets chains. Greater investment in Maharashtra’s rural infrastructure is required to boost the agriculture sector and improve the livelihoods and living standards of the state’s rural population. Most of the state’s population (54.8%) live in rural areas and are primarily dependent on the agriculture sector for employment and income generation. Rural connectivity underpins rural development in Maharashtra. Maharashtra has a road network of 303,000 km of which 67% are rural roads. Roads are the dominant mode of transportation, utilized by over 80% of passengers and 60% of freight traffic However long-term underinvestment has affected all levels of the road network, and the rural road network is in the worst condition. In rural areas, many villages still rely on earthen tracks, which are unsuitable for motorized traffic and can easily become impassable during the rainy season. Poor road infrastructure affects economic growth in rural areas, agricultural productivity, and employment, and has a strong link to poverty. The State Government of Maharashtra recognizes the importance of rural connectivity in vitalizing rural livelihoods and addressing poverty alleviation. The state government has prepared Vision 2030 based on the United Nations Sustainable Development Goals (SDGs).3 Vision 2030 outlines five areas for strengthening: (i) agriculture, (ii) infrastructure, (iii) industry, (iv) social sector, and (v) governance. In terms of infrastructure, a goal of Vision 2030 is to develop quality, reliable, sustainable and safe roads that are affordable and provide equitable access for all. The plan includes development of major corridors and a rural road network which is expected to support economic development and human wellbeing. The 1 Government of Maharashtra, Directorate of Economics and Statistics Economic. March 2018. Survey of Maharashtra 2017–2018. Mumbai 2 World Bank. 2017. http://documents.worldbank.org/curated/en/806671504171811149/pdf/119254-BRI-P157572- Maharashtra-Poverty.pdf 3 Government of Maharashtra, Planning Department. 2018. Vision 2030. Mumbai 2 state government hopes to improve the state’s road network using its own resources and assistance from international development partners. The state has completed 24,439 km of roads under Pradhan Mantri Gram Sadak Yojana (PMGSY), which connects 8,315 habitations.4 The government has initiated the Mukhya Mantri Gram Sadak Yojana (MMGSY) program in the state to connect other villages in remote rural areas not yet reached by PMGSY and improve existing roads also not covered under PMGSY. The MMGSY aims to develop 30,000 km of rural roads over 4 years to improve access in remote areas to public facilities, markets, and goods. The project is aligned with the government’s Vision 2030 and the country partnership strategy for India 2018–2022 of the Asian Development Bank (ADB).5 The project will improve about 2,100 km of rural roads to all-weather standards. This improvement will support rural populations across 34 districts and help bolster the agriculture sector. The project will also support the government’s agricultural strategy for increasing agricultural productivity by (i) encouraging commercial agriculture and agribusiness development, (ii) increasing employment opportunities for rural poor people, and (iii) reducing the state’s poverty incidence. Development of the rural road network is one critical initiative aimed at achieving the state’s agriculture growth target of 5% per annum. Other major initiatives include doubling farmers’ income, implementing the climate resilient agriculture project funded by the World Bank,6 and increasing agricultural market access. The project is included in the country operations business plan, 2019–2021 for India.7 The Rural Development Department, Government of Maharashtra will be the executing agency, and the Maharashtra Rural Road Development Association (MRRDA) will be the implementing agency. A project management unit (PMU) established within MRRDA will support project implementation. The Secretary cum Chief Executive Officer of MRRDA will be responsible for project coordination and monitoring. There will be 34 project implementation units (PIUs) in 34 districts under 6 regions. A project director assisted by two deputy project directors will comprise the PMU. The PMU will be assisted by consultants. The 6 regional offices headed by 6 superintending engineers will supervise the 34 PIUs. Each PIU will be headed by an executive engineer,