National infrastructure plan will massively boost productivity, thanks to its focus on rail and road projects.
India's reinvigorated national infrastructure plan worth $1.35 trillion will not only boost industry productivity and help the country achieve its climate goals by increasing production of clean energy, but also massively boost multi-modal connectivity and dramatically increase industrial productivity - thanks to the plan's focus on rail and road projects.
The ambitious infrastructure plan called Gati Shakti “will be a national infrastructure master plan for our country which will lay the foundation of holistic infrastructure and will lead to an integrated and holistic pathway to our economy,” Indian Prime Minister Narendra Modi said in a national address on the occasion of India’s 75th year of Independence on 15th August.
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Among key challenges obstructing progress in India’s infrastructure sector are its complicated land acquisition policies, implementation delays, and the risk of project overruns due to bureaucratic quagmire - factors which the Modi government has tackled head on from its inception to drive and sustain economic growth and achieve manufacturing competitiveness under its Make in India programme.
The government, for instance, has set a target of constructing 12,000 km of national highways in 2021-22. In addition, the government has also implemented policies to minimize delays, simplify compliance procedures, and improve transparency to increase the pace of infrastructure projects. Policies include simplification of land acquisitions, faster clearance/approvals from relevant authorities, using technologies, such as On-line Computerized Monitoring System (OCMS) and Pro Active Governance and Timely Implementation (PRAGATI) to improve project monitoring, and creating cost committees at the federal level to monitor cost overruns.
All these proactive measures will now come in handy as India ramps up its national infrastructure pipeline, with special focus on roads and railways.
The government launched the National Infrastructure Pipeline (NIP) for FY 2019-25, under which projects have been identified to construct, refurbish, strengthen, and expand roads networks, housing, urban development, railways, conventional power, renewable energy, and irrigation. Key programs will focus on highways and railways.
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The Industrial Corridor Projects, part of the National Industrial Corridor program, is an example, and aligns with the development of industrial cities and improving inter-city connectivity so that they can compete with top global investment destinations.
In the national budget announced in February, Finance Minister Nirmala Sitharaman had announced that nearly 7,400 projects were under various stages of implementation as part of the National Infrastructure Pipeline (NIP). As of end-March 2021, work on 2108 highway projects with a total length of 64,010 km were ongoing according to the Ministry of Road Transport and Highways. And to facilitate the road infrastructure, in the current fiscal year, the government has provided the highest-ever allocation from its budget to the ministry.
Rail transport will also receive a major boost with the ministry of railways planning to enhance rail infrastructure, especially in northeast India. The government has also announced various projects as part of its Sagarmala project to develop sea infrastructure. Through the ongoing project, announced in 2015, the government aims to modernize the ports and integrate them with special economic zones, build port-based smart cities, industrial parks, warehouses and transport corridors.
With these concerted steps and the budget allotments, India is moving ahead to break silos within the transport network and improve travel time and productivity for industries and investors.