Shimla – The Himachal Pradesh government has been instructed to return 90% of the interest earned on contractors’ security deposits for rural road projects to the Government of India. This move aligns with the 90:10 ratio in which the central government allocates funds to the state under the Pradhan Mantri Gram Sadak Yojana (PMGSY), a key scheme for rural road development in special category states like Himachal.
The directive was issued by the National Rural Infrastructure Development Agency (NRIDA) and communicated to the State Rural Road Development Agency of Himachal. It specifies that the security deposits, which total ₹174 crores, are kept in financial instruments such as fixed deposits (FDs) and flexi deposits. The interest accrued on these funds must be returned in the same ratio as the central funding for rural roads, with 90% going to the Centre.
Contractors are required to deposit 5% of the total allocated project amount as a security deposit, of which 2.5% is deducted initially and the remaining 2.5% at a later stage of the project. This security deposit ensures compliance with the terms of the contracts awarded for road construction under PMGSY.
