Context
A crucial third pillar of facilitating free movement supports the two policy pillars of green growth and domestic manufacturing for Atmanirbhar Bharat in the nation.
Therefore, this third pillar entails building infrastructure that will lower logistics costs while also improving India’s transportation efficiency.
Relevance
GS Paper-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
Mains Question
How can infrastructure support India’s role as a logistics and supply chain hub for the region, given that recent changes in the world have further elevated India’s profile as a preferred location for global supply chains as well as a market? (250 words)
Key Takeaways
- With sustainability as a shared imperative, the focus in India is now not only on business ease but also on business cost.
- India will become more competitive on the global stage if logistics costs are reduced.
- Recent changes in the world have elevated India further in the public eye, not only as a market but also as a preferred location for global supply chains.
- The government has rightly emphasised infrastructure as India’s first and most crucial requirement in order to join these value chains.
- India presents a unique opportunity to serve as a logistics and supply chain hub for the region, and given that the domestic market is still growing, this is the perfect time for it to do so. This perfect confluence of good things has happened.
Governmental Initiatives to Increase Infrastructure and Logistics
- The government has committed its largest-ever capital expenditure outlay of $10 trillion in the budget for 2023–2024, as part of its efforts to expand infrastructure and logistics.
- The expenditure in 2021–2022 was $6.03 trillion, and the revised estimate for 2022–2023 is $7.3 trillion.
- The government has correctly recognised the need to maximise the use of its capital investments and the advantages of having various ministries oversee project planning and execution.
- Digital Solutions: o Thanks to the PM Gati Shakti initiative, India may be the first nation to digitise and make these processes visible across all ministries.
- It is estimated that the use of digital traffic solutions like FastTag has led to a reduction in carbon dioxide emissions of close to 1 million tonnes.
- Launch of New Infrastructure Projects: In India’s most recent budget, investments totaling 75,000 crore were allocated to 100 critical infrastructure projects.
- Green technologies, digital connectivity, and multimodal connectivity can all be used in and displayed in these projects.
- They will help reduce carbon emissions nationwide in addition to lowering business costs.
- Private investment will follow because it is a primary goal of private-sector investments as well to support further reductions in India’s carbon footprint.
- Strengthening Collaborative Federalism: The government has correctly recognised the need for Indian states to support the infrastructure plan and logistics policy of the federal government.
- The budget allots states concessional funding in the form of loans with favourable terms, which must be invested by 2023–2024 in order to carry out significant projects and meet their goals.
- Attempts at Balancing Regional Growth: The government wants to make sure that development is spread out among India’s various regions.
- The increased capital spending is anticipated to produce a positive feedback loop that supports domestic demand while sharpening India’s position as a global manufacturing hub.
PM Gati Shakti Plan 2021
- Gati Shakti, a digital platform, will bring together 16 Ministries for integrated planning and coordinated implementation of infrastructure connectivity projects as part of the PM Gati Shakti Plan 2021.
- The infrastructure plans from various Ministries and State Governments will be incorporated.
- Economic zones, such as textile and pharmaceutical clusters, defence corridors, electronic parks, and agri zones, will be covered in order to increase connectivity and boost the competitiveness of Indian businesses.
- It will also make extensive use of technology, including BiSAG-spatial N’s planning tools with ISRO imagery (Bhaskaracharya National Institute for Space Applications and Geoinformatics)
Six pillars form the foundation of PM GatiShakti
- Comprehensiveness: With a single centralised portal, it will incorporate all current and future initiatives of various Ministries and Departments. Every Department will now be able to see each other’s activities, providing essential information for thorough project planning and execution.
- Prioritization: Using cross-sector interactions, this will enable various Departments to rank their projects in order of importance.
- Optimization: After identifying crucial gaps, the National Master Plan will help various ministries plan for projects. The plan will assist in choosing the fastest and least expensive route for moving goods from one location to another.
- Synchronization: Different Ministries and Departments frequently function in isolation. The project’s planning and execution are not coordinated, which causes delays. By ensuring that work is coordinated between the various departments, PM GatiShakti will assist in coordinating the operations of the various layers of governance in a comprehensive manner.
- Analytical: The plan will compile all the data in one location using GIS-based spatial planning and analytical tools with 200+ layers, giving the executing agency better visibility.
- Dynamic: Through the GIS platform, all Ministries and Departments will now be able to visualise, review, and monitor the progress of cross-sectoral projects, as satellite imagery will periodically provide on-ground progress and the progress of the projects will be updated on a regular basis on the portal.
Way Ahead
- A sustained conversation with users and private players will be necessary for infrastructure planning in the future to eliminate bottlenecks.
- The Unified Logistics Interface Platform can be used to ensure data integration, which will increase efficiency (ULIP).
- The best possible use of the infrastructure in India. India could significantly lower its overall capex needs and prepare for the future by comparing each asset to its best-in-class equivalents and implementing digital solutions.
- Demand aggregation or pooling, data on capacity, real-time tracking, and analytics are some of the essential elements of end-to-end logistics management.
- Incorporating cloud-based IT systems, integrating and coordinating among Indian logistical service suppliers, and using small service providers are additional efficiency-boosting measures that will be put into practise more frequently.
- The outsourcing of tasks to (and the development of) third- and fourth-party service providers in India should make PM Gati Shakti even more significant and environmentally friendly.
Conclusion
- Projects like PM Gati Shakti and the National Logistics Policy lay the groundwork for India to seize its chance to become a crucial link in global supply chains.
- The cost of doing business will go down, and India will become an even more desirable location thanks to improved logistics.
- As PM Gati Shakti’s third pillar of effective logistics infrastructure continues to take shape, the pillars of manufacturing and green growth will continue to reap benefits.
- As a result, this focus is a crucial component of a solid plan to achieve rapid economic growth.
- Rapid growth made possible by new policy measures should eventually assist in providing Amrit Kaal dividends to more than 1.4 billion Indians.
