Impact of Pradhan Mantri Gram Sadak Yojana on Rural Employment: Evidence from a Large-Scale Household Survey in India

Abstract

Rural road infrastructure plays a vital role in improving economic opportunities by enhancing connectivity, reducing transportation costs, and facilitating labor mobility. The Pradhan Mantri Gram Sadak Yojana (PMGSY) is one of the largest rural road development programs in India, aimed at providing all-weather road access to unconnected rural habitations. This study examines the impact of PMGSY on employment outcomes using a large-scale primary household survey covering 22,730 rural respondents across multiple Indian states. To capture variation in program intensity, a composite PMGSY Exposure Index is constructed based on household awareness of the scheme, perceived road quality, and ease of road usage. Employing a fixed-effects empirical framework with state-level controls, the results reveal a positive and statistically significant association between PMGSY exposure and employment improvement. Heterogeneity analysis indicates that while both farming and non-farming households benefit from improved rural connectivity, the employment gains are moderately stronger for farming households. The findings provide policy-relevant evidence on the role of rural road infrastructure in supporting employment generation and inclusive rural development in India.