Reviewing Gati Shakti infrastructure plan for new India

November 02, 2021 12:02 PM

This programme would involve sixteen central government agencies, including Railways, Roads and Highways, Petroleum and Gas, Power, Telecom, Shipping, Aviation, and others.

Gati Shakti, infrastructureThe Rs 100 trillion initiative aims to improve interconnection between road, rail, air, and waterways to save travel time and boost industrial output.

By Ambrish Parajiya

Prime Minister Narendra Modi said on India’s 75th Independence Day that the government will begin the ‘PM Gati Shakti Master Plan,’ an Rs.100 lakh-crore initiative to create ‘holistic infrastructure.’ It is a national master plan for coordinating connective infrastructure projects across modes of transportation, and it is expected to assist India in realising its ambition of becoming the world’s “business capital.”

What Is Gati Shakti Master Plan

Prime Minister Narendra Modi unveiled the PM Gati Shakti, a multi-modal connectivity “national masterplan” that is likely one of his most ambitious efforts, as he attempts to eliminate decades of bureaucratic entanglements and silos in infrastructure projects. The Gati Shakti master plan would employ geo-mapping and real-time data in a single centralised platform to guarantee that important agencies and states have visibility over significant projects in the pipeline, particularly those with multi-sectoral and multi-regional implications. This programme would involve sixteen central government agencies, including Railways, Roads and Highways, Petroleum and Gas, Power, Telecom, Shipping, Aviation, and others.

Through infrastructural development, Gati, the Hindi term for speed, strives to enhance economic growth (Shakti). Prime Minister Modi has been talking about the ‘new world order’ in many of his recent speeches. NICDC (national industrial corridor development corporation limited) is leading the Gati Shakti mission. It will connect Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Visakhapatnam, and ultimately till Chandigarh with industrial sectors in all states. It is similar to the development plans carried out in the US after the second world war and three decades ago in China. It is likely to add twice as many skilled labourers, increase exports by three times and forex by four times. With maximum focus on developing airports, goods trains and dedicated freight corridors, North East is also being included with the rest of the country in this development mega drive.

The ‘Gatishakti’ comprehensive infrastructure development initiative aims to increase industry productivity and job possibilities. It is regarded as the government’s comprehensive approach to the development of modern trains, highways, canals, and airways.

This national master plan establishes the groundwork for the country’s entire infrastructure and provides an integrated and holistic economic route. The Rs 100 trillion initiative aims to improve interconnection between road, rail, air, and waterways to save travel time and boost industrial output.

The government of India’s production-linked incentive is anticipated to boost demand for a variety of other industries, including cement, metals, and electricity, as well as create jobs. It would also make manufacturing more competitive on a global scale.

Gati Shakti will also offer chances for new future economic zones, to reduce travel time and increase industrial production through road connections. This investment project will help to enhance the country’s post-pandemic economy and increase the country’s indigenous technology output, reducing reliance on other countries.

The increase in infrastructure spending is in line with the government’s plans to increase capital spending on infrastructure to support economic development.

According to Prime Minister Narendra Modi, the Gatishakti plan would serve as the foundation for India’s regeneration, allowing it to create world-class products utilising cutting-edge technology and innovation.

The following six pillars support the Gati Shakti Master Plan:

1. Comprehensiveness: Integrating all government efforts into one centralised platform to provide data and visibility to every government agency for effective planning.

2. Prioritization: Cross-sectoral cooperation is used to determine project priorities.

3. Optimisation: The project planning process will uncover significant stumbling blocks in conjunction with the ministries, allowing the ministries to design the best solutions.

4. Synchronization: In addition to guaranteeing cross-departmental coordination, Gati Shakti will assist in the holistic synchronisation of each department’s activities.

5. Analytical: The strategy will include a GIS-based spatial planning and analysis tool. This will give the executing agency consistent data in one place, allowing for greater visibility and decision-making.

6. Dynamic: Using satellite imagery to fuel an integrated GIS platform, all ministries and departments will be able to track, assess, and visualise the development of cross-sectoral initiatives.

In a way, these are the same principles that are being utilized in Dholera SIR, PM Modi’s brainchild that he wants to use as an exemplary greenfield global smart city.

Need for Gati Shakti

Modi stated during the launch of the Gati Shakti programme that due to the large gap between macro planning and micro execution, issues such as lack of coordination, lack of prior knowledge, and thinking and working in silos were causing construction delays and money waste.

“There is a new excellent quality road created by one agency, then a few days later another department digs that same road to lay water pipelines,” the PM explained. Such a lack of cooperation must be addressed.”

Individual ministries and departments frequently function in silos, resulting in delays due to a lack of cooperation in project planning and implementation. By guaranteeing coordination, PM GatiShakti will assist in synchronising the actions of each department, as well as multiple layers of governance, holistically.

While the government has not said it officially, it is clear that Gati Shakti would be used to oversee the majority of the big projects under the Rs 110 lakh billion National Infrastructure Pipeline.

Bharatmala, Sagarmala, UDAN, inland waterways, dry/land ports, and other infrastructure initiatives of the Union and state governments would be included in Gati Shakti. The strategy will also ensure that the work is completed quickly and at a low cost. The goal is to bring together all key parties to quickly build the appropriate size infrastructure in the right place.

The master plan is expected to transform the infrastructure sector by ensuring integrated, seamless, and timely delivery of projects within budgeted costs, free of delays and cost overruns caused by multiple changes, and will further encourage private companies to partner with government projects, boosting the Indian economy.

Targets Under Gati Shakti

One of the Modi government’s main objectives in the second term has been a large infrastructure drive, which Gati Shakti continues.

By 2024-25, the plan calls for 11 industrial corridors, a defence production turnover of Rs 1.7 lakh crore, and 38 electronics manufacturing clusters and 109 pharmaceutical clusters.

The national master plan establishes goals for all infrastructure ministries from 2024 to 2025. For the Road Transport and Roads Ministry, the goal is to build 2 lakh km of national highways, complete 5,590 km of four or six-lane national highways along with coastal areas, and connect all state capitals in the northeast with four-lane or two-lane national highways.

Railways must handle 1,600 million tonnes of freight by 2024-25, up from 1,210 million tonnes in 2020, and decongest 51% of the network by constructing additional lines and implementing two Dedicated Freight Corridors (DFCs).

By 2025, the goal is to double the present aviation footprint to 220 airports, heliports, and water aerodromes, which will need the construction of an additional 109 such facilities. The national master plan states that by 2024-25, overall cargo capacity handled at ports would have increased to 1,759 MMTPA, up from 1,282 MMTPA in 2020.

According to the proposal, the country’s gas pipeline network would be quadrupled to 34,500 kilometres by 2024-25 by constructing a 17,000-kilometer trunk pipeline connecting important demand and supply centres for the industry. The entire transmission network for power lines is expected to reach 4.52 lakh circuit km by 2024-25, with renewable energy capacity rising to 225 GW from 87.7 GW currently.

Expected Outcomes

The plan will aid in the mapping of current and planned connection initiatives. In addition, there will be a great deal of transparency about how the country’s many regions and industrial centres are connected, particularly in terms of last-mile connection.

Make in India will benefit tremendously from a comprehensive and integrated transportation connectivity plan that integrates various forms of transportation.

It will assist India in becoming the world’s business capital.

Concerns Related to Gati Sakti

Low Credit Acceptance: Even though the government has implemented “substantial” banking sector reforms and the Insolvency and Bankruptcy Code has resulted in roughly Rs. 2.4 lakh crore in bad loan recovery, there are worries regarding falling credit offtake trends.

Banks provide credit off-takes to assist firms to obtain finance for future projects by promising future income and demonstrating the existence of a market.

The dearth of Demand: There is a lack of private and investor demand in the post-Covid-19 scenario.

Structured Difficulties: Project execution is extremely sluggish by global standards due to land acquisition delays and legal issues. In terms of land access and environmental clearances, obtaining permissions is extremely complex; moreover, current litigation in court slows infrastructure development.

Final Words

PM Modi’s Gati Shakti is a positive step forward. However, it must address structural and macroeconomic stability problems that have arisen as a result of excessive government spending. As a result, a stable and predictable regulatory and institutional environment is critical to the success of this endeavour.

(The author is Director at GAP ASSOCIATES. Views expressed are personal and do not reflect the official position or policy of the Financial Express Online.)

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