(1) The Central Government shall identify and prioritise the projects, schemes or activities for release of Funds in consultation with the executing agencies and the executing agencies shall observe the criteria and furnish necessary details of the projects, schemes or activities as specified under these rules, to the Central Government to facilitate identification and prioritisation of the schemes.
(2) If, all the projects, schemes or activities so identified cannot be sanctioned due to shortage of resources in the Fund, the Central Government shall prioritise the projects, schemes or activities on State Roads including roads of economic importance and inter-State connectivity as per the following procedure, namely:-
(a) the priority shall be given to take up projects from the Core Network only and within the Core Network, priority shall be assigned in the following order-
(i) the potential roads which are considered as important from the perspective of declaration as new national highways;
(ii) the State Highways;
(iii) the Major District Roads; and
(iv) the other District Roads:
Provided that while identifying the schemes on a selected stretch, priority shall further be given in the following order-
(i) to the construction of Railway Over Bridges (ROBs) and Railway Under Bridges (RUBs);
(ii) to the construction of bridges;
(iii) to the construction of road safety and bridge projects on State Border;
(b) the State highways and major district roads either directly connecting to or leading to an important market centre, economic zone, industrial zone, agricultural region, tourist centre, religious centre, schools and educational institutions, socially important structure, such as cremation grounds, bathing ghats, old-age homes, orphanages and public utilities, benefiting vulnerable sections of the society, such as, the Scheduled castes, the Scheduled tribes, ferry-ghat roads and roads connecting ecologically sensitive areas and the like where significant economic activity is being undertaken shall be considered as the projects of economic importance;
(c) the inter-State roads or bridges at the border on State highway and major district roads necessary for ensuring through communication between two adjacent States shall be considered as the project of inter-State connectivity;