The direction comes in the wake of road building projects of over 1,000 km in extremist-hit areas not making any progress.
"Road Transport and Highways Minister C P Joshi has asked key officials of eight Naxal-hit states including, Odisha, Chhattisgarh, Jharkhand and Maharashtra to consider awarding projects for smaller stretches of roads," a senior Ministry official told PTI.
"Besides they have been asked to consider whether the projects could be completed in two parts - earth work and bitumen work," he said.
Joshi has also asked states to rope in local contractors for executing such projects besides involving local bodies like gram panchayat etc, he added.
Sources said several projects at Bastar in Chhattisgarh, Malkangiri in Odisha and Gadchiroli in Maharashtra besides some projects in Andhra Pradesh have been badly impacted.
The government in 2009 had approved a scheme for development of 1,202 Km of National Highways and 4,363 Km of state roads in "Left Wing extremism-affected areas of 34 districts in eight states" in three years.
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These states also include Andhra Pradesh, Bihar, Madhya Pradesh and Uttar Pradesh.
However, the progress has been extremely slow owing to a number of factors, including poor law and order situation.
Meanwhile, the government has set a target of building 1,200 km this year in the naxal hit areas, while it completed 1,000 km in 2011-12 and 254 km in 2010-11 in such areas.
As per sources, the government has been able to spend only Rs 2,132 crore out of Rs 7,300 crore earmarked for this programme so far.
The physical progress, sources said, was 1,811 km till June this year. The project is likely to be completed now by March, 2015.