The Indian Railways recently commissioned its first Gati Shakti Cargo Terminal in Asansol Division, aligning with the Prime Minister’s vision “Gati Shakti”. This momentous event is the first since the publication of the GCT policy in December 2021. Anticipation surrounds it as it is expected to bolster Indian Railways’ earnings dramatically and positively affect the country’s economy.
Unpacking the PM Gati Shakti Scheme
Launched in 2021 by the government, the ambitious PM Gati Shakti scheme or the National Master Plan for multi-modal connectivity, strives to implement a coordinated approach to the planning and execution of infrastructure projects aimed at decreasing logistics costs. The focus is on expediting projects, saving costs, and job creation over the next four years.
The Gati Shakti scheme will absorb the Rs 110 lakh crore National Infrastructure Pipeline launched in 2019. Alongside decreasing logistics costs, the scheme aims at enhancing cargo handling capacity and slashing turnaround time at ports to foster trade. Goals include developing 11 industrial corridors, two new defence corridors, extending 4G connectivity to all villages, and expanding the gas pipeline network by 17,000 kms.
Expected Outcomes of the PM Gati Shakti Scheme
The scheme anticipates mapping existing and proposed connectivity projects, providing clarity on the linking of different regions and industrial hubs, especially for last-mile connectivity. The scheme foresees an integrated transport connectivity strategy fostering Make in India and unifying different modes of transport, positioning India as the future business capital of the world.
The Need for Integrated Infrastructure Development
Objectively, a gap exists between macro planning and micro-implementation due to insufficient coordination and information sharing as departments often work in isolation. The logistical cost in India, which stands at about 13% of the GDP, is significantly higher than that of developed nations. This high logistical cost hampers the competitiveness of India’s exports. Hence, creating quality infrastructure for Sustainable Development is globally recognized as an effective way to stimulate economic activities and generate employment on a large scale.
Challenges Faced
The Gati Shakti scheme has several challenges to overcome. Despite government’s ‘strong’ banking sector reforms yielding recoveries around Rs. 2.4 lakh crore of bad loans, concerns about declining credit off-take trends persist. Post-Covid-19, there has been a noticeable lack of private demand and investment. Additionally, structural problems like land acquisition delays, litigation issues, and approval difficulties obstruct project implementation.
Moving Forward with the PM Gati Shakti Scheme
PM Gati Shakti is a commendable initiative needing to address broader structural and macroeconomic stability concerns stemming from high public expenditure. Ensuring a stable and predictable regulatory and institutional framework to underpin this initiative is vital.
With its ambitious goals and strategic planning, the PM Gati Shakti scheme promises to reshape India’s infrastructure landscape. However, it will be imperative to mitigate the identified challenges and capitalize on the scheme’s potential to make India a global business capital.
