Gati Shakti: STREAMLINING GROWTH

Infrastructure development is the key component in the economic growth of a country. But what is more important is having an integrated and holistic approach towards this development. While Prime Minister Gati Shakti Master Plan is a step in the right, smooth execution of the programme will be crucial. Prajakta Karnik takes a peek into the ambitious Rs 100 lakh crore master plan.

Indian infrastructure sector, which largely includes power, roads, dams, bridges, ports and urban infrastructure development, has been making a significant progress in the last few years, thanks to the initiatives taken by the governments, both at the Central and state levels. These decisions have played a crucial role in time-bound creation of world-class infrastructure in the country, thus propelling India's overall economic development.

While the efforts and intentions have been in the right direction, the focus lacked an integrated approach towards the development. In order to cement the development gaps and to streamline the project execution processes, Prime Minister Narendra Modi announced a massive and ambitious PM Gati Shakti National Master Plan for multi-modal connectivity. The Master Plan is a giant stride in India's ambitious goal of achieving USD 5 trillion economy.

PM GatiShakti is designed to break departmental silos and institutionalize holistic planning for stakeholders across major infrastructure projects and to ensure that the country does not waste money or time due to lack of coordination in infrastructure projects. Under the plan, everything, from roads to railways, from aviation to agriculture, various ministries and departments would be linked. To streamline the processes, a technology platform has also been prepared for every mega project so that every department has accurate information on time.

The master plan takes a holistic approach to sector-specific developments by integrating 16ministries in a joint committee to implement and monitor Rs 100 lakh crore of investment.

“India is now taking a bold  step in the direction of raising its 'competitive index', setting apart a network of multi-modal transport systems for commuters as  well as logistics, largely boosting exports of goods  and domestic manufacturing. The government is  trying to simplify time-taking application, approval processes and the multiplicity of regulatory norms  through this scheme,” Kanika Verma, Researcher & Investment Specialist, Invest India said.

She noted that the Gati-Shakti programme is  structured to prioritise all-mega  infrastructure and  connectivity targets by 2024-2025. “In economics  parlance, this would have multiplier effects in the  economy by saving public revenue and taxes. The  immediate effect would be seen through  increased  demand for construction materials, demand for  labour and second order effects by better reach  and connectivity,” Verma added.

Highlights of the Master Plan

• Roadways capacity to be increased with the National Highway network to touch the 2 lakh km mark.
• Aviation will receive a massive boost with around 200 new airports, heliports and water aerodromes envisioned in the plan.
• Capacity of railways transport cargo to be increased to around 1600 tons by FY25.
• Ease in the electricity access with the transmission network to be increased to 4,54,200 circuit km.
• Renewable capacity to be increased to 225 GW by FY25. Also around 17,000 kms of gas pipelines will be completed in the same year.
• 4G connectivity for the villages by FY22.
• 20 New mega food parks.
• Substantial new employment opportunities will be created through the launch of the Gati Shakti Plan.

Multi-modal Connectivity

In today's era, one of the key components of integrated infrastructure development is to ensure that goods and people can efficiently and seamlessly be able to move and switch across various modes of transport. This necessitates a coordinated and interconnected approach, wherein roads would ideally feed into railway tracks, which could then connect to ports and so on.

Under the PM Gati Shakti Master Plan, the government aims to achieve this target by integrating the various schemes announced by the government under different ministries like roads and highways, ports, airports, railways, etc.

Under Sagarmala, shipping sector to see an increase in cargo capacity at the ports to 1759 Million Metric Tonnes per Annum (MMTPA) by 2024-25 from 1282 MMTPA in 2020. Cargo movement on all national waterways will be 95 Million Metric Tons(MMT) by 2024-25 from 74 MMT in 2020. Cargo movement on Ganga to be increasedfrom 9 MMT to 29 MMT by 2024-25.

Powered by Regional Connectivity Scheme - UDAN, civil aviation sector to see anincrease in the aviation footprint globally. 220 airports, heliports and water aerodromes to be operational by 2024-25. 109 airports including existing 51 airstrips, 18 greenfield airports, 12 water aerodromes and 28 heliports to be developed by 2024-25.

In the road transport and highways sector, under the Bharatmala programme, two lakh km route of national highway network is proposed to be achieved by 2024-25. Along the coastal areas, 5590 kmof four & six-lane national highways to be completed by 2024-25. All state capitals in North Eastern Region to be connected with either four-lane National Highway or two alternate alignments of two-lane configurations each by 2024-25.

By 2024-25, Indian Railways to see a decongestion by 51 per cent due to completion ofcritical projects. Cargo to be handled by Indian Railways will be 1600 million tonnes upfrom 1210 million tons in 2020. Western and eastern dedicated freight corridors forfaster movement of freight trains to be completed.

With Gati Shakti, the country will get an integrated, harmonised transportation and logistics  grid as logistics  and  supply chain costs account for 12% to 13% of the Gross Domestic Product  (GDP), compared  to  the  global average of 8%. Equally true with the road network at JNPT, linking the  port with  the  hinterland  road network are NH4B, NH4,  NH17, NH 3 & 8 and state highway  54,

“Multimodal connectivity integrates the supply chains of the region further enhancing trade  connectivity and benefits not only the business  community but also the people of the sub-region. It has positive impacts on employment, domestic demand mobilisation, and improvises the macroeconomic situation of the country. Efficient  and adequate systems of transportation, logistics, and trade-related infrastructure can assist a country's  ability to compete on a global scale. Gati Shakti will  lend  more power  and speed to the infrastructure  pipeline by sharing resources and developing  synergies towards building a more harmonised  ecosystem. It will ensure last-mile connectivity to  economic zones in a definite timeframe by ultimately improving India's productive capacity and global competitiveness in manufacturing in India,” Sanjay Sethi IAS, Chairman Jawaharlal Nehru Port Trust said.

According to Navneet Kumar, Manager, Crisil Research, the programme promotes multimodality, which is  an efficient way of cargo movement, vis-à-vis bulk/disjointed movement. “The ease of cargo movement provided by multimodal logistics improves the utilisation of industrial assets and limits  wastages. Despite such advantages, multimodal or  containerised freight accounts for less than 10% of overall freight (in billion tonne kilometre terms),” he added.

Echoing similar views, Vivek Lohia, Director, Jupiter Group, Chairman, National Council of Railways, ASSOCHAM, noted that the master plan will positively impact the manufacturing and exports of the country and play a key factor in making “Aatmanirbhar Bharat” a success.

Digital Communication

In the telecommunication sector, a total length of 35,00,000 km of optical fiber cable network is to be laid down by 2024-25. Connecting all 2,50,000 Gram Panchayats with high-speed internet and 4G mobile connectivity by 2022. 

Under the Digital Communications Policy of the government, various projects like National Broadband Mission, Digital India, BharatNet and now Gati Shkati has prove the importance of optical fibre cables as one of the most important elements & backbone of a modern communication network.

“The pandemic has proved the importance of a robust telecommunication network for people, businesses and governments. It also emphasizes that broadband connectivity has become a virtual necessity and may soon get classification of a fundamental human right.

Since optical fibre cables are being used for voice, video, data and even in monitoring and sensing various parameters. At present railways, NHAI and other ministries uses Optical Fibre cables for communication. However, in the Gati Shakti project all these and various ministries will join hands for integrated planning & implementation of infra projects and to provide seamless connectivity,” opined Amit Mathur, Sr. Vice President- Sales & Marketing, Finolex Cables.

Due to GatiShakti, the demand for optical fibre cables is poised for a robust growth. Since the project will bring synergy among various ministries and most importantly it will solve the problem of ROW for the connectivity of infrastructure.

“The present broadband penetration along with associated benefits is yet to reach interiors of India. We think its full potential & benefits will be realized with Gati Shakti project. Finolex has been awarded by GOI for its significant contribution to the BharatNet project and will continue to contribute in projects of national importance like Gati Shakti,” Mathur added.

Meeting “Green” Targets

Under the Gati Shakti Master Plan, new and renewable energy sector capacity is to be increased from 87.7 GW to 225 GW by 2024-25 as 50 per cent of India's power generation capacity is to be met by renewable energy sources by 2024-25. 

The plan also proposes power transmission network to be upgraded from 4,25,500 circuit km to 4,54,200 circuit km by 2024-25 and improving the transmission network performance parameters to match the best global standards.

In Petroleum and Natural Gas sector, 17000 km long trunk pipeline, connecting major demand and supply centers for industries, is to be added by 2024-25 making a total length of 34500 km of pipeline across the country. All states are proposed to be connected with the trunk natural gas pipeline network by 2027.

“GatiShakti program is envisioned to integrate various department to leverage technology for faster project clearance and reduce reworks. This program can unleash the potential of single window clearance of renewable energy applications across states, departments, and sectors. If implemented with progressive policies, it has a huge potential to unlock and integrate renewable energy projects across highways, food & agriculture storage facilities, industrial clusters, transportation, and many others,” said Tejus A.V. Chief, Wind and Solar Farms, CleanMax.

Bottlenecks & Solutions

PM Gati Shakti is a landmark initiative that will enable coordination among different ministries, states and departments, facilitate ease of planning and bring down the overall costs of implementation as well. There could be initial bottlenecks with the platform however, once these are taken care of, this system can turn out to be a game-changer in the space of infrastructure development.

“With the information available to all the stakeholders at different levels – central, state, cities and even panchayats, taking up projects would get simplified, bundling of projects within ministries or departments, single approvals for multi-faceted projects and avoiding duplication of efforts and costs would become possible. A holistic approach to the infrastructure and logistics projects would ensure the faster pace of development and is indeed expected to bring out efficiencies as well as governance in the system,” Vipula Sharma, Senior Director - Ratings, Brickwork Ratings (BWR) said.

Expressing similar views, Karthik Krishnamurthi, Country Head, Marketing and Sales, Hitachi Energy India stated that while the Gati Shakti plan is a welcome initiative as it intends to augument infrastructure development in India. “Efforts and conversations are still ongoing to understand how best the plan can be implemented as well as to come up with a right mechanism to identify and resolve challenges in the process of building quality infrastructure,” he said.

According to Lohia, the initial challenges that one  could face is the easy available of funds and navigating through the new modus operandi. “However, we strongly believe that this plan is only going  to  benefit  the country and take it to newer heights,” he added.

Alok Sahay, Secretary-General and Executive Head, Indian Steel Association noted that the  important bottlenecks include stable and consistent  policies, major raw material security, availability  of raw materials not available domestically – at  reasonable prices, for which imports need to be  allowed at nil customs duty. 

“Easy access to finance at a reasonable interest rate and conducive compliance requirements will also  benefit the industry. Steel has been at the forefront of infrastructure and socio- economic development, it's not just only an enabler in India's growth story but has laid the foundation for that growth story. The green economy has become very important post- COP26 UNCC summit at Glasgow. The important aspects which will put pressure on the bottom lines will be based on the Trade Défense Instruments; increasing regulatory push at home markets; carbon regulation and border measures on exports markets to a green economy; specific entry requirements  for import; development of new green technologies (hydrogen); and implementation of the climate projects to offset companies' emission levels. These aspects need the focus of the government,” he added.

Expressing similar views, Vishal Kanodia, Managing Director, Kanodia Group noted that India's excessive dependence on roadways and under utilization of rail, air & water ways has increased the supply chain costs. This supply chain shortage increase the transportation cost & made Indian product less competitive in national & international markets.

“Although  the government  has  taken  all  care to various counterparts of GatiShakti, but cement &  steel sector should be given more subsidy in supply of their products in the Gati Shakti projects,” he added.

Jagannarayan Padmanabhan, Director, Transport & Logistics, Crisil Infrastructure Advisory noted that private  sector  participation  will  be  critical  for the  effective  rollout  of  this  much-needed  initiative, whether  for  augmenting  existing  infrastructure  or greenfield  development.  “In  recent  past,  we  have seen  significant  appetite  for  built  infrastructure and the authorities havealso been able to get good value due to larger participation. Moreover,  the  private  sector  can  recoup  an exponential  increase  in  value  (bankability)  if  it  is able to show progress. Hence,  a  time-bound  rollout  with  the participation  of  the  state  governments  and  other stake  holders  can  help  ensure  better  market access for our manufacturing sector,” he said.

As Safar Mohammad Khan, General Manager -HDD, Apollo Techno Industries sums up, “Although Gati Shakti is a step in the right direction, it needs to be coupled with a stable and easy regulatory and institutional framework. Lowering logistic costs is critical for India. Government should take essential steps to strengthen the logistic ecosystem across the country. Government should also take some good steps on the current bureaucratic systems which take long time to execute any infrastructure project.”

Hits: 122