Goal: To guarantee comprehensive planning and execution of infrastructure projects over the next four years, with a focus on accelerating ground-level work, cutting costs, and generating jobs.
The National Infrastructure Pipeline, which was introduced in 2019 and cost Rs 110 lakh crore, would be absorbed by the Gati Shakti scheme.
The plan aims to increase cargo handling capacity and shorten turnaround times at ports to increase trade in addition to lowering logistical expenses.
In addition, it plans to create two new defence corridors, one in Tamil Nadu and the other in Uttar Pradesh, and 11 industrial corridors. Another goal is to extend 4G access to every town. The network of gas pipelines will be expanded by 17,000 kilometres.
It will assist in achieving the challenging goals the government has set for the years 2024–2025, such as doubling the length of the national highway system to 2 lakh kilometres and building more than 200 new airports, heliports, and water aerodromes.
Integrated Approach: It aims to bring together 16 Ministries with a focus on infrastructure.
Long-standing difficulties including haphazard planning, a lack of standardisation, difficulty with permissions, and the timely building and utilisation of infrastructure capacities would all be helped by this.
Gati Shakti Digital Platform: It entails the development of a common platform under which infrastructure projects may be efficiently planned and carried out through real-time collaboration across various ministries and departments.
The plan will assist in mapping both current and future connection efforts.
Also, there will be a great deal more clarity on the connections between the nation’s many regions and industrial clusters, especially in terms of last mile connectivity.
Made in India will be considerably supported, and various means of transportation will be merged, by a comprehensive and integrated transport connectivity strategy.
It will assist India in becoming the world’s commercial hub.
Development of an Integrated Infrastructure is Required:
Due to the lack of coordination and sophisticated information sharing caused by departments thinking and working in silos, there is a significant gap between macro planning and micro implementation.
A research found that India had higher logistical costs than wealthy nations, at around 13% of GDP.
India’s exports are significantly less competitive as a result of these high logistics costs.
It is well acknowledged that building high-quality infrastructure is a tried-and-true method for fostering numerous economic activity and substantial employment.
The programme complements the National Monetization Pipeline (NMP).
The NMP has been announced to give potential investors a ready list of assets to spark interest in investments and to provide a clear framework for monetisation.
Low Credit Offtake: Notwithstanding the government’s “strong” reforms of the banking industry and the Insolvency and Bankruptcy Code’s about Rs. 2.4 lakh crore in recoveries from bad loans, there are concerns about the trends of reducing credit offtake.
Banks extend credit to businesses in order to assist them in obtaining finance for upcoming initiatives through the assurance of future earnings and evidence of an existing market.
Absence of Demand There is a shortage of investor demand and private demand in the post-Covid-19 context.
Issues with litigation and the acquisition of land have slowed down project implementation, which is extremely slow by international standards.
It is exceedingly challenging to obtain permissions for infrastructure projects in terms of access to land and environmental clearances. Moreover, pending legal disputes cause delays.
Steps to Take:
PM Gati Shakti is a positive development. But, it must address issues with structural and macroeconomic stability brought on by increased public spending.
Therefore, it is essential that this undertaking be supported by a solid and predictable institutional and regulatory framework.