Cabinet approves plans to borrow funds from NABARD for rural roads

New Delhi, Sep 21 (UNI) The Union Cabinet today approved plans to borrow funds from a separate window under NABARD for achieving the rural roads targets of 'Bharat Nirman' and designated National Rural Roads Development Authority (NRRDA) as the agency for this purpose.

A meeting of the Cabinet, chaired by Prime Minister Manmohan Singh, also decided that all the road projects, to be funded from the separate NABARD window, would continue to be approved by the Rural Development Ministry in accordance with the existing guidelines of the 'Pradhan Mantri Grameen Sadak Yojana'' (PMGSY).

''The quantum of funds to be borrowed, and the number of tranches in which in which these will be released to the states will be decided by the Rural Development Ministry,'' an official spoksperson said.

The additional programmes for the fund will help meet the funding gap of rural roads component of 'Bharat Nirman', which is aimed at augmenting the rural road network by providing new links to unacclunted habitations and upgrading the existing network to modern standards.

The Bharat Nirman goas are to be implemented by 2009.

The Task Force, constituted by the Planning Commission, had recommended that NRRDA, a society under the Rural Development Ministry, should act as the agency of the ministry for borrowing funds from the NABARD's special window.

''Suitable amendments to the NRRDA Memorandum of Association and bye-laws will be made accordingly,'' the official said, pointing out that the Rural Development Ministry would devise the detailed operational guidelines for drawal of funds from NABARD and their release,'' the official said.

Funds from this window will supplement grants from the Central government. Since the repayment is to be made from the proceeds of cess, borrowing by a Central agency would be faster. ''This will help in meeting the funding gap and and also in achieving the objectives of Bharat Nirman within the stipulated time-frame,'' the spokesman said.

The Cabinet also decided to introduce the Central Road Fund (Amendment) Bill, 2006 in Parliament, aimed at amending the Central Road Fund Act, 2000 to enable borrowing and repayment of land for development of rural roads.

The Central Road Fund Act, 2006 does not allow leveraging of Cess funds for rual roads.

Further, the Cabinet decided to promulgate an ordinance to amend the Act to give effect to the proposed amendments, which would enable raising additional funds through borrowing and repayment of loan raised for modernisation of rural roads.

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