Introduction
Recently, the government of India has launched the ambitious Gati Shakti scheme or (PM Gati Shakti National Master Plan 2021) for multi-modal connectivity plan, with the aim of coordinated planning and execution of infrastructure projects to bring down logistics costs.
Key Points About the Scheme
Aim: To ensure integrated planning and implementation of infrastructure projects in the next four years, with focus on expediting works on the ground, saving costs and creating jobs.
- The Gati Shakti scheme will subsume the Rs 110 lakh croreNational Infrastructure Pipeline that was launched in 2019.
- Besides cutting logistics costs, the scheme is also aimed at increasing cargo handling capacity and reducing the turnaround time at ports to boost trade.
- It also aims to have 11 industrial corridorsand two new defence corridors – one in Tamil Nadu and other in Uttar Pradesh. Extending 4G connectivity to all villages is another aim. Adding 17,000 kms to the gas pipeline networkis being planned.
- It will help in fulfilling the ambitious targets set by the government for 2024-25, including expanding the length of the national highway network to 2 lakh kms , creation of more than 200 new airports, heliports and water aerodromes.
Integrated Approach
: It intends to bring together 16 infrastructure related Ministries.
This will help in removing long-standing issues such as disjointed planning, lack of standardisation, problems with clearances, and timely creation and utilisation of infrastructure capacities.
- Gati Shakti Digital Platform: It involves the creation of a common umbrella platform through which infrastructure projects can be planned and implemented in an efficacious manner by way of coordination between various ministries/departments on a real-time basis.
- Expected Outcomes
- The scheme will help mapping the existing and proposed connectivity projects.
- Also, there will be immense clarity on how different regions and industrial hubs in the country are linked, particularly for last mile connectivity.
- A holistic and integrated transport connectivity strategy will greatly support Make in Indiaand integrate different modes of transport.
- It will help India become the business capital of the world.
- Need for Integrated Infrastructure Development:
- There exists a wide gap between macro planning and micro implementation due to the lack of coordination and advanced information sharing as departments think and work in silos.
- According to a study , the logistical cost in India is about 13% of GDP , which is higher than developed countries.
- Due to this high logistical cost, the competitiveness of India’s exports is greatly reduced.
- It is globally accepted that the creation of quality infrastructure for Sustainable Development is a proven way , which gives rise to many economic activities and creates employment on a large scale.
- The scheme is in synergy with the National Monetisation Pipeline (NMP).
- The NMP has been announced to provide a clear framework for monetisation and give potential investors a ready list of assets to generate investment interest.
- Associated Concerns.
- Low Credit Off-take: Although the government had taken up ‘strong’ banking sector reforms and the Insolvency and Bankruptcy Codehad yielded about Rs. 2.4 lakh crore of recoveries on bad loans , there are concerns about declining credit offtake trends.
- Banks give credit off-takes to help businesses acquire financing for future projects through the promise of future income and proof of an existing market.
- Lack of Demand: In the post-Covid-19 scenario,there is a lack of private demand and investment demand.
- Structural Problems: Due to land acquisition delays and litigation issues , the rate of implementation of projects is very slow on global standards.
- Getting approvals is very difficult in terms of land access, environmental clearances; also impending litigation in court delays the infrastructure projects.
Way Forward
- PM Gati Shakti is a step in the right direction. However, it needs to address structural and macroeconomic stability concerns, emanating from high public expenditure.
- Thus, it is imperative that this initiative is underpinned by a stable and predictable regulatory and institutional framework.
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