NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT rrfJrrr^rrf ^^^r^frT^, =^- 600 034. TAMIL NADU REGIONAL OFFICE, CHENNAI - 600 034. i^f^T 3TS5r^^ ^rrr F^i^r: %^ 15 Evaluation Study Series No. : Chennai 15 2003 RURAL ROADS IN TAMIL NADU i f^Ri]d 1%^ t jiFfK 3TmR^ ^f^ tew i^ t Evaluation Study on Rural Roads Financed under RIDF in Dindlgul District n$^ ffq" 3fk jniftw tew iNp NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT diHdHI4;^^l^«bW!d'M, %^ - 600 034. t TAMIL NADU REGIONAL OFFICE. CHENNAI - 600 034. i^jr^jchH ai^zpR ^^IcTT ^EJ^^r : %^ 15 Evaluation Study Series No. : Chennal 15 2003 1^ i FOREWORD The role of infrastructure in economic development is well acknowledged. Basic infrastructure tike roads, bridges, irrigation structures, etc. contribute enormously for tiie devebpment of the rural econorny. Like any o^ sector, irifrastnicture development is essential f)r promotion of agriculture also. As majority of the population in India depend on Afficulturefor their livelihood and they are concentrated in rural areas, the need for strengthening the basic infrastructure in rural area was felt right from our independence. However, till recently investments in these irifrastructure werefimded mainly from budgetary sources. A chcmge in this outlook came in 1995-96 by the setting up of Rural Infrastructure Development Fund in NABARD mth a view to extend finance to infrastructure projects using the frmd from banking sector. As on 31 March 2003, loans to the tune ofRs.29,475 crore were sanctioned to the State Governments, local bodies, etc. for investments in sectors like roads, bridges, minor irrigation projects, power stations, fishing jetties, schools, health centres, etc. In Tamil Nadu, operation under RIDF started from Tranche II in 1996-97 onwards and as on 31 March 2003, more than Rs. 1,893 crore has been sanctioned and Rs.l300 crore disbursed. Since major share (more than 60 %) of the ban sanetioned in Tamil Nadu was for investments in rural roads, it was thought appropriate to launch an evaluation of the same to estimate the impact. * Accordingly, a study was conducted in Dindiffil district, Tamil Nadu, which reveal that works have been executed as per stipulated norms. Positive impact was realized by almost all the * sections of the society on account oftlK new/ improved connectivity, mcjor beneficiaries being the farming community, vehicle operators, shop owners etc. More importantly, capital formation in agriculture, which is an area of concern today, showed improvement in the benefited area. However, poor offtake of complementary investmeriis and bw levels of activities by service sectors in the benefited area remains a matter ofconeem. Further, so far, negligjbk maintenance works have been undertaken in the roads leading to the deterioration of the quality of the investment. The study recommends according priority for rural roads under RIDF, comprehensive approach while selecting investments for area development, specific: budgetary albcationfor maintenance of works, imposing user charge to cover the maintenance cost of the road by involving NGOs, extension of activities by service departments like health, education, agriculture, horticulture, animal husbandry, etc. as also banks in the benefited area, measures to reduce time lag at I. department level, etc.forfiirther improving implementation of works under RIDF. It is hoped that this report will provide valuable feedback about implementation aspect of^ project and helpfid b the policy makers, State Governments and other agencies in improving the i implementation of such works as also in framing theirfriture policies. Chennai C.R.Patnaik 8 December 2003 Chief General Manager yicittjapT anMcf) f^cfjRT % ^ ^ anefTTgcr ^^fcHTc^fTcfj 3iic|;^Aichdi3ft '^ "gf^ cf^r gokn^ T^\m^ Tfzfj % I jji4|ui srafczjcRSTT % Rcbm ^ smm^ >H>!-cnicHcb ^fci^ntf vi^ ^H^, gcT, tott ^ ^ 3nf^ -^IHMd: ^ "^ fcfcfjRT ^ ci||L|cb ^^iq % >H^|i|ch t I SF^ 5t^ c}?t ?R? fr ^[TSfNTjcT ^^^I^HIcH* ^gtesft % ^ cl^t aTFRlfcpcTT c^ ^ fcIXT /ift 3|c^N^i|cJ, % I ¥fR?f CJTI srf^rcfJRT _ vJPirTT T[F?r^ ^ ^ ^f^ %, ^ 3R^ 31lRHRcbl ^ fcftT c^ tR ^ f^ %^ 3TcT: 3rrv51T^ ^ cfl^ % €t f^ St^ % 'm^ i\^H\<^ ^gtosft % ^ cPt HvjIKd 6RT% c|?t 3i|c|!^Alcbdl H6'^>H cj^t TJ^ I cTarrf^ 3TT?r wf> '^^ 'w\ ^ ^^ ^RiiicJI ^gfcrenaft % ^ ^ f^icm ejui^ ^^Rmrit ^ RcdMll^d ar i M 1995-96 % ^kn ^^MT^ ^ JJI4|UI >H>!-cnirHcb ^gf^ ^f^Jid ^?^ ft? (^^Ml^ui c?7r czntjcp srmR ^^R f^ ^fzfT 1 ^ ^fcfjR ff^nm^ >H\^HIcHch ^gtosft 3Tarict ^fT^, gef, ef^ t^rjtf tff^??fvjRT3Tt, >3^-^?%?H, HoKjOlf^iit, ^f<gcl, ^fcIRSZI %^ ^ fttcF^RT % fePT W^ ^fRcf)Rt, ^fSTT^I f^cfjRTl ^ 31 ^ 2003 cTcP 29,475 W^ clcfj % ^ItUT ^ f^t^rjk H^jiRiit \T^PT ^ ^ I cf^ 1996-97 ^ dPldHIvS "^T^ ^ ^Riilcfl vH>{xHieHch ^gto fctcpm Prf^ ^^ II ^ 3PcPicT fPrar^ ^^RxRTcR^ ^gfcTEJTsft % R|cbl>H cPT cppj WU^ t%^ ^TUT cTSTT 31 TTTxT 2003 cT^ 1,893 ^fvft^ ^ ift 3Tt^ ^dll ^ ^r^ ^ f^^ ^ ^ I ?r2TT 3^ cTcf5 1300 cfvft^ cm 9[iq >HRldRd f^ ^ |[^ % I dPldHI-g ^ 3Rf cTcfJ TJF^TDT ^?T^^ ^ 3r?KPT >Hf^dRd f^ ^ ^pJT %, ff^ dlPldHlvg ^ SRT^FT cl>T STf^mJcff fl^^ (60 yfcl^ld ^ 3Tf^) JJ|Ji|u| ^^T^cfj T^ R^f^ld f^J^ TTzn, 3TcT: ^3^ WTcT % ^ge^JltcfR 3l^ZRPT cfvffTT ^3f^ ^?Fr?n ^T^ I cjc^HH STeipPT ^ ?Tf^ ^T^J^T % f^-iljjd f^ cf?r ^iiPid f^i^ ^nrar % f^m^ PitMiRd wJit c^ Mt^ HHC^U^I cf?r KTH ^ ^J^Icfvf 3l^ZRH >M^H f^ TR[T % I ^ ^^I^ W^m v^^ c|5t STRcn cpT >HcbKlrHcb wm ^leT % cpffW-cp^ ^^ cpit ^ qf^clf^ f3TT % I f^rf^ cPlt ^ ^?R% 3Tf^ cTT^mf^ ^ cfTcT cprt ^ cg^^ ^*i<\^. cfTB^mTelc^ cTSn gcbM^K I ^ % I I^ ^FTcT ^3^?Rr cl5t 5Rcn ^ ^FRr% HFC^ eUcT C^ ^ f^ ^ f^TFrfuT ciTt q%in, ^5Tr% 3TM i?r ^JT^ srf^ ^p^ CPT f^^^ %, -pr^ ^ Wcr f^ %: crarrf^, ^ err^irrf^ ^ ^ f?cp f^icRtt CPT ^^TTO^ yRiq CCT ^ sr^ ^ f^Tpffer^ j|fciRl(^ f^Rn c|5t encT % 1 g^T^, ^fT^ % f^n#T ^ WRPTT ^ ^3^ ^j^g^^^m % V <=i^HH sreiRpT ^ Tji^ mr\^\ tor^ f^ ^ 3r^?f^ TTF^ ^?r^ ^ ^r^ ^ ^fc4>>l cf)t aPHTcT f^ 3TR3TT?^Vl' ^ 3RF^ ^T^ ^ ^^-^^31^ ^ cJjRft ^ fen? f?r?tW elvjIcTliJ 3TT^^^, W^ ^^-^^37^ ^ crFTcr cfjT ^f5^ cfR% ^ fcHT %-^77cfJT^ ^Rsnsft cpt iff ^llPld cfR ^?T^cFJ yihckliaft ^ y'TR dMMI, ^ f^^TFTt ^ ^fcir?«2T, ftren, c^, WPM^, ^gqieH C!«TT ^ 3nf^ ci5t Jif^RW ^ f^l^cTR 3rR.3nf.^.Xjqj. ^ SPTP^ cPRrf^^RH ^ cfjnff c|5t ^ 3Tt^ >H^Hd cR^ cTSJT f^TTPff^ ^TR ^ Ff% cfTcft STTcff^ 3RRTeT cl^ cfJH cfR% % >3iTRt 317^ c^ m^^ ^ ^ % I 3fT?T7 % f^ I^ f^qt^ % MR-I^IVJUI ^ chmi-c|iH qgT ^ ^TRRI ^ H^c^Ljuj r^tetfcfj cf8J7 cblilJ-^AJH % cFJI^ ^ ^tcTR 3RT l,'Cjp^4i cfjf Sftpft ITT^t -^^ % f^Wt^W cf cfirat ^ >HyHR ^ >H6l^dl W<T Ft ^fr^ I 08 R^*«l^ 2003 CREDIT LIST f^^t^ ^ ^HT 3Jk 3)PdH ?iT JISFT 35^^ J^eview and Finalisation of the Report Department of Economic Analysis and Research, NABARD, Mumbai 400 051 HPtaf^ Guidance ^•3tR.M<sHi^».^.TT.g C. R. Patnaik, CGM 3?K.HiJKion, g.jr R. Nagarajan, GM sf.G^.OKidHi^d.j.T.jr Dr. S. Saravanavel.DGM. Field Visits and Collection of Data G. Gopakumaran Nair, AGM jpj. asteosmfoT, wr.sr.^. N. Kothandapani, Asst. Manager Analysis of Data & Drafting of Report G. Gopakumaran Nair, AGM Acknowledgments The National Bank, Regional Office, Chennai gratefully acknowledges the assistance rendered by Chief Engineer at Chennai, Divisional Engineer at Madurai and Sub Divisional Engineer at Kodaikanal of Rural Roads Wing of Highways Department, Govemement of Tamil Nadu. National Bank also acknowledges the cooperation extended by the Samples covered under the study 111 CONTENTS Page No jiragjSH Foreword i flur ^ stk 3imR Credit List & Acknowledgments Hi ^RrtTHT Abbreviations v tbiifnici* i\\i.\>i\ Executive Summary vii 5€ZRT Chapter 1. MRtiii Introduction 1 2. 35S9zr3?tTqgrffr Objective and Methodology 5 3. ^qcr 3ik foicrtr gflnc^ Sample and District Characteristics 11 4. MRilloiHi (Wi'xjiJH Project Implementation 15 5. ft^^cJPicT Cost of the Investment 23 6. ftt?T ^ 3nf5fg5r Economics of the Investment 27 7. 3i5nf?JOT ?tm / jrfflg Intangible Benefits/Impacts 44 8. snRfgjoqarBTthiT Economic Viability 56 9. ^TRm. ft^ 3fk <i<^fd Summary, Conclusion and Recommendation 60 uRRii Appendix 67 ^irari 5RT jrasrflicT 4io<yi<iH sitzran Riildf ^ ^trr 69 List of Evaluation Study Reports Published by NABARD IV ABBREVIATIONS ADE Assistant Divisional Engineer BT Black Top CD Cross Drainage CE Chief Engineer DE Divisional Engineer DDM District Development Manager ERR Economic Rate of Return GLC Ground Level Credit GO Government Order GOI Government of India GOTN Government of Tamil Nadu JE Junior Engineer Kg. Kilogram KM Kilo Metre M. Metre MSL Mean Sea Level NABARD National Bank for Agriculture and Rural Development NFS Non Farm Sector NGO Non Government Organisation NPW Net Present Worth OPS Other Priority Sector PC Premix Carpet PU Panchayat Union PWD Public Works Department RBI Reserve Bank of India RCC Reinforced Cement Concrete RIDF Rural Infrastructure Development Fund RO Regional Office RR Rural Road SE Superintendent Engineer SHG Self Help Group VOC Vehicle Operating Cost WBM Water Bound Macadam BASIC DATA Project Rural Roads •> Area Kodaikanal Taluk in Dindigul district Period of Loan Tranche n ( 1996-97) Reference year of the Study : January to December 2002 - Period of field visits 20 January 2003 to 01 February 2003 (Rs. lakh) No. Particulars 1 Villagers interviewed during the study (Nos.) 120 2 Works covered under the study (Nos.) 7 3 Estimated/sanctioned cost of investment (historical price) 560.8 4 Actual cost of investment (historical price) 463.7 5 Actual cost of investment (reference year price) 513.3 6 Actual economic price of the investment (reference year price) 484.5 7 Loan from RIDF 417.3 8 Contribution from Government of Tamil