World Bank supports road network in Punjab India

Washington, United States of America – The World Bank 2006-12-05 approved a US$250 million loan to the Indian state of Punjab for the rehabilitation and expansion of the State’s road network.

Like India as a whole, Punjab is challenged to develop a modern road network with the quality and capacity to meet the needs of increasingly time and reliability conscious production and distribution systems. The Punjab State Roads Sector Project will assist the Government of Punjab (GOP) to provide a targeted approach to the comprehensive improvement and maintenance of the 7,400 km of Plan Roads (state highways, major district roads and other district roads), which link the rural road network to the National Highways and provide most of the main road links in the state.

Punjab, located in the north-west, is one of India’s most prosperous states. It has the highest per-capita income and lowest poverty headcount in India, and it ranks second in the India Human Development Index (2001). However, the deterioration of Punjab’s economic environment since the mid-1990s brings into question the state’s ability to sustain these improvements. Although some improvement is visible since 2004, economic growth in the state of 6.2 percent in 2005-6 is still below the national average of 8 percent.

“Economic diversification is critical to accelerate economic growth in Punjab,” says Fayez Omar, Senior Manager, India Program and Acting World Bank Country Director for India. “Without an effective road network, it will be very difficult to encourage the shift from the present heavy dependence on wheat and rice to higher value, more time sensitive agricultural production and distribution. Effective roads are also essential to the development of light manufacturing and service industries which rely on high quality logistics.”

Better roads, lower transport costs and higher transport service standards have been identified by the Government of Punjab (GOP), in their 10th Five-Year Plan, as core elements of the required enabling investment climate and a prerequisite for economic diversification and accelerated economic growth.

Isabel Chatterton, World Bank Senior Financial Specialist and project task team leader, said the likely growth areas are both the agricultural and industrial sectors that need efficient supply and logistics chains. “Sectors such as textiles and contract farming are very dependent on good transport and reliable delivery.”

The loan from the International Bank for Reconstruction and Development is payable in 20 years including 5 years of grace period.

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Auteur: Redactie Infrasite

Bron: The World Bank