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Insights into Editorial: Connecting ministries for infrastructure projects

 

Context:

In recent, Prime Minister Narendra Modi launched the “PM GatiShakti — National Master Plan” for infrastructure development aimed at boosting multimodal connectivity and driving down logistics costs.

PM Gati Shakti aims to institutionalize holistic planning for major infrastructure projects.

The projects will be designed and executed with a common vision and will incorporate the infrastructure schemes of various ministries and state governments such as the Bharatmala road project, Sagarmala waterways plan, ports and the UDAN scheme.

 

What is the project?

PM GatiShakti is a digital platform that connects 16 ministries — including Roads and Highways, Railways, Shipping, Petroleum and Gas, Power, Telecom, Shipping, and Aviation, with a view to ensuring holistic planning and execution of infrastructure projects.

The portal will offer 200 layers of geospatial data, including on existing infrastructure such as roads, highways, railways, and toll plazas, as well as geographic information about forests, rivers and district boundaries to aid in planning and obtaining clearances.

The portal will also allow various government departments to track, in real time and at one centralised place, the progress of various projects, especially those with multi-sectoral and multi-regional impact.

 

Objective of the PM GatiShakti — National Master Plan”:

  1. The objective is to ensure that each and every department now have visibility of each other’s activities providing critical data while planning and execution of projects in a comprehensive manner.
  2. Through this, different departments will be able to prioritise their projects through cross–sectoral interactions.
  3. The Prime Minister, while launching the project, said examples of poor infrastructure planning included newly-built roads being dug up by the water department to lay pipes.
  4. The GatiShakti platform aims to prevent such situations by addressing the issue of government departments working in silos.
  5. The government expects the platform to enable various government departments to synchronise their efforts into a multi-modal network.
  6. It will also offer satellite imagery for monitoring of projects. It is also expected to help state governments give commitments to investors regarding timeframes for the creation of infrastructure.

 

How will the platform help bring down logistics costs?

  1. Studies estimate that logistics costs in India are about 13-14% of GDP as against about 7-8% of GDP in developed economies.
  2. High logistics costs impact cost structures within the economy, and also make it more expensive for exporters to ship merchandise to buyers.
  3. By incorporating infrastructure schemes under various ministries and state governments, including the Bharatmala and inland waterways schemes, and economic zones such as textile and pharmaceutical clusters and electronics parks, the GatiShakti platform aims to boosting last-mile connectivity and bringing down logistics costs with integrated planning and reducing implementation overlaps.
  4. Currently, a number of economic zones and industrial parks are not able to reach their full productive potential due to inefficient multi-modal connectivity.

 

How will progress under the National Master Plan be monitored?

The National Master Plan has set targets for all infrastructure ministries.

  1. India is targeting an increase in the total cargo handled at Indian ports to 1,759 million tonnes per annum (MTPA) by 2024-25, up from 1,282 MTPA in 2020 — as well as increasing cargo movement on national waterways to 95 million tonnes from about 74 million tonnes in the same period.
  2. The PM said the government was aiming at adding over 200 airports, helipads, and water aerodromes over the next 4-5 years beside nearly doubling the existing natural gas pipeline network, which is about 19,000 km.
  3. A project monitoring group under the Department for Promotion of Industry and Internal Trade (DPIIT) will monitor the progress of key projects in real time, and report any inter-ministerial issues to an empowered group of ministers, who will then aim to resolve these.

 

How will this impact coordination between ministries for projects?

Currently, any inter-ministerial issues that arise relating to a project are addressed in regular meetings of infrastructure-related ministries. These issues are raised in advance, and then taken up.

Through the PM PRAGATI (Pro-Active Governance And Timely Implementation) portal, many issues were resolved even prior to such meetings.

The GatiShakti portal would help reduce the human intervention required as ministries will be in constant touch, and projects will be reviewed by the project monitoring group in real time.

 

Challenges associated with the functioning of PM Gati Shakti:

  1. The Economic Survey for 2020-21 underscored the role of active Centre-State partnerships for infrastructure building.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. Further, these delays add up to the costs of many projects, making them a less efficient and more costly project for development.
  8. There are other issues such as litigation issues, alienation of local communities and the violation of environmental norms, etc.
  9. 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.