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Introduction:
Infrastructure creation in India had suffered for decades from multiple issues such as lack of coordination between different departments. This not only caused great inconvenience but was led to wasteful expenditure. Last few years have seen unprecedented focus on Infrastructure projects. Now a National Masterplan for Multi-Modal Connectivity- PM Gatishakti has been launched by Prime Minister Narendra Modi to address the key issues of infrastructure development through institutionalizing holistic planning for stakeholders for major infrastructure projects. Instead of planning & designing separately in silos, the projects will now be designed and executed with a common vision. This master plan will incorporate the infrastructure schemes of various Ministries and State Governments. It will also leverage technology extensively including spatial planning tools with ISRO imagery. This move will enable all Ministries and Departments to visualize, review and monitor the progress of cross-sectoral projects, through the GIS platform. It will also provide the public and business community information regarding the upcoming connectivity projects, other business hubs, industrial areas and surrounding environment.
Highlights the scheme:
- Gati Shakti will be a National Infrastructure Master Plan for our country which will lay the foundation of holistic Infrastructure.
- This scheme of more than 100 lakh crores rupees will result in new employment opportunities for lakhs of youth.
- The plan will help raise the global profile of local manufacturers and help them compete with their counterparts worldwide.
- It also raises possibilities of new future economic zones.
- A similar plan, called the National Infrastructure Pipeline was previously announced.
National Infrastructure Pipeline:
In the budget speech of 2019-2020, Finance Minister announced an outlay of Rs 100 lakh Crore for infrastructure projects over the next 5 years.
- NIP is a first-of-its-kind initiative to provide world-class infrastructure across the country and improve the quality of life for all citizens.
- It will improve project preparation, attract investments (both domestic & foreign) into infrastructure, and will be crucial for attaining the target of becoming a $5 trillion economy by FY 2025.
- Covers both economic and social infrastructure projects.
Report by Task force:
The task force headed by Atanu Chakraborty on National Infrastructure Pipeline (NIP), in May 2020, submitted its final report to the Finance Minister.
Important recommendations and observations made:
- Investment needed: ₹111 lakh crore over the next five years (2020-2025) to build infrastructure projects and drive economic growth.
- Energy, roads, railways and urban projects are estimated to account for the bulk of projects (around 70%).
- The centre (39 percent) and state (40 percent) are expected to have an almost equal share in implementing the projects, while the private sector has 21 percent share.
- Aggressive push towards asset sales.
- Monetisation of infrastructure assets.
- Setting up of development finance institutions.
- Strengthening the municipal bond market.
How Gati Shakthi scheme helps in good governance in infrastructure
- It is a significant step forward for the country’s logistics, where inefficiencies result in an estimated cost burden of 13-14% of gross domestic product (GDP), compared to 6-8% in more competitive economies.
- Greater visibility in core areas such as railways, shipping and roads and highways should serve to feed the development of facilities in an integrated manner.
- With a single portal including multi-layer levels of data, decision-making and various implementation processes can be streamlined and made both efficient and timely.
- The initiative builds upon the government’s previous actions and policies to promote infrastructure.
- Public-private partnerships have been redesigned and include new models such as toll-operate-transfer and a hybrid annuity model.
- Access to finance has opened up through innovative mechanisms such as infrastructure and real estate investment trusts and development finance institutions.
- Gati Shakti is expected to facilitate the planning, implementation, monitoring and administration of transport infrastructure projects so that they do not suffer delays.
- Time savings will lead to monetary savings, which can be ploughed back into the social sector, among others in need.
- For industry, the availability of detailed data on the facilities at a particular location would save a lot of time and effort in taking investment decisions.
- A plug-and-play model for industrial parks, as promised through the scheme, has long been a request of Indian industry so that approvals and clearances are pre-obtained for an enterprise to start functioning expeditiously.
Challenges associated with the functioning of PM Gati Shakti:
- The Economic Survey for 2020-21 underscored the role of active Centre-State partnerships for infrastructure building.
- The Survey projects maximum investments towards NIP sectors such as energy, roads, urban infrastructure and railways for FY 2021 and 22, with about ₹8.5-lakh crore to be invested by either side annually.
- With the pandemic and its associated challenges, the state governments don’t have enough finances to invest such large amounts. This will delay the implementation of the master plan.
- According to the RBI’s paper, the growth rate in credit off-take has steeply declined to 5.8% in November 2020, as against 14.2% in 2013.
- This will reduce private investment in infrastructure projects. At present, there are concerns about the declining credit offtake trends from banks as they don’t want to get into another Non-Performing Asset (NPA) crisis in future.
- The plan does not address a few key infrastructural challenges: Land acquisition is often the biggest impediment in the development of India. Many development projects get delayed due to land acquisition issues.
- Further, these delays add up to the costs of many projects, making them a less efficient and more costly project for development.
- There are other issues such as litigation issues, alienation of local communities and the violation of environmental norms, etc.
- These issues make the rate of implementation of projects is very slow on global standards. The Gati Shakti master plan offers little or no solution to these major challenges.
Conclusion:
- The portal would help states avoid both cost and time overruns, and allow them to provide the benefit of valuable infrastructure to their residents sooner.
- The Gati Shakti will boost economic growth, attract foreign investments and enhance the country’s global competitiveness thereby enabling smooth transportation of goods, people and services and creating employment opportunities.
- Thus, the PM Gati Shakti will help India to realise its dream of becoming the “business capital” of the world. But all the challenges must be addressed on priority in order for the project to be a success.
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