Thrust On Quality Physical And Social Infrastructure Will Help India Accomplish Viksit Bharat Objective

The PM Gati Shakti - National Master Plan for Multi Modal Connectivity is essentially a digital platform to bring 16 ministries, including railways and roads, together for integrated and coordinated implementation of infrastructure connectivity projects

The growing Indian economy needs the best of infrastructure. In keeping with this, both the Centre and states have been focusing on creating the best of physical and social infrastructure as this will facilitate the country’s economic and social development.

Physical infrastructure revolves around roads as they connect cities, towns and states and ensure a smooth and seamless travel. Towards facilitating a better connectivity and reduce travel time, we have four-lane and six-lane roads, express roadways and flyovers, state and national highways, among others, which will help a wide range of sectors, including goods transport, tourism, trade and commerce, industries, hinterland development and rural connectivity. They have led to the uplift of rural economic development and contribute to national integration.

The ‘Bharatmala’ road to prosperity has enabled India to boast of the second largest road network in the world that stretches up to 63.45 lakh km.

Capital expenditure of the Ministry (including private investment) increased 5.7 times from around Rs. 53,000 crore in 2014-14 to approximately Rs 3.01 lakh crore in 2023-24.

The Bharatmala Pariyojana entails projects covering 27,391 km against an estimated cost of Rs. 8,75,774 crore. Incidentally, as on date, works on projects to an extent of 17,411 km have been completed, including economic corridors, inter-corridor roads, feeder roads, national corridor, national corridor efficiency program, peripheral connectivity roads and Expressways, to name a few.

Efforts are underway to improve inland waterways. However, this needs to be explored more thoroughly and expedited as India's vast river belt has to be beautified, which, once achieved, can boost domestic and international tourism.

India has the largest connectivity by way of railway tracks and railways are patronized heavily by a majority of the population and for transportation of goods given their cost effectiveness and efficient movement.

The recent decision to introduce faster and superfast trains across routes has been a welcome game changer. There is no denying that railways play a great role in India's journey towards emerging as the fastest growing economy. Meanwhile, further efforts to modernise, introduction of high-end trains, commercial development of railway stations and privatisation of rail routes should get further attention. The government’s efforts should be supplemented by private investment in railways.

The introduction of indigenous semi high-speed self-propelled Vande Bharat trains, Vistadome coaches, Tejas Rajdhani trains, SMART-inspired coaches and NMGH coaches have helped improve the railway network to significant levels. Most people and businesses depend on railways.

India has best of natural ports with hinterland facilities which has led to both the domestic and global trade. New ports are being developed and this will enable global connectivity with supply chains and industrial development as they will facilitate movement of natural resources, essential raw materials and heavy machinery movement. Moreover, infrastructure development near ports will reduce congestion and simplify warehousing of exportable and imported goods. The cost of logistics will be an essential component of international trade and the Centre is trying to reduce it substantially as lesser cost will facilitate better competitiveness and the country’s international trade will get a major push. The National Logistics Policy ((NLP) to reduce logistics costs from 13-14 per cent of GDP to eight per cent that aligns with global standards is a step in this direction. It is likewise with the Sagarmala Programme that is aimed at enhancing the performance of the logistics sector. Right now, around 839 projects (under the PPP mode) with investments to the tune of Rs. 5.8 lakh crore have been lined up for implementation under the Sagarmala programme by 2035.

A major expansion is taking place in the civil aviation sector, which as of today boasts of 148 airports as against the 74 in 2014. Way back in 2018, the Union Government went in for the PPP mode for six airports, including Mangalore, Lucknow, Ahmedabad, Thiruvananthapuram, Jaipur and Guwahati in earlier to similar PPP charted airports in New Delhi and Mumbai. The government has drawn up a National Infrastructure Pipeline with a capital expenditure of Rs. 111 lakh crore from 2020-25, consisting of energy (24 per cent), roads (18 per cent), urban (17 per cent) and railways (12 per cent) amounting to 71 per cent of the projected infrastructure investment with the balance earmarked for airports, ports, digital infrastructure, irrigation, rural infrastructure, agriculture and food processing infrastructure and social and industrial infrastructure with the envisaged participation of 39 per cent by the Centre, 40 per cent by states and 21 per cent by private players. There are 9850 projects under 60 sub-sectors with a total project cost $2038.84 bn. Of them, 1988 projects are under development.

The PM Gati Shakti - National Master Plan for Multi Modal Connectivity is essentially a digital platform to bring 16 ministries, including railways and roads, together for integrated and coordinated implementation of infrastructure connectivity projects. Economic zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters and agri zones are all duly covered and are thereby assured of improved connectivity.

The timely implementation of these proposed projects is paramount as any further delay will lead to cost overruns besides not getting the desired outcome. There are reports that cost overruns and delays plague over 1800 infrastructure projects; 449 projects see overruns of Rs. 5.01 lakh crore. These delays are mainly because of land acquisition delays, forex and environment clearance issues and other insufficient infrastructure support. The Centre and state governments must take up a collective responsibility to implement these projects within the timeframe.

The central and state governments’ thrust on infrastructural investments indicate the commitment to infrastructure development.

The government has established ‘National Bank for financing infrastructure and Development (NaBFID)’ to support long-term non-recourse infrastructure financing. It has provided an initial capital of Rs. 20000 crore, which is supplemented by an additional grant of Rs. 5000 crore. NaBFID has already sanctioned Rs. one lakh crore disbursement. A good development is that NBFCs, and long-term financing institutions like NaBFID have been extending support to these infrastructure projects. There is also the need for insurance companies, pension funds and provident funds to participate substantially in long-term infrastructure bonds raised by these lending institutions to enhance their resources base. Moreover, since most of the projects are also in alternative energy, there is a need to raise sustainable finance, green bonds and climate finance etc.

RBI Deputy Governor M. Rajeshwar Rao has put it aptly, while stating “NaBFID has a unique opportunity to play a transformative role in shaping India's infrastructure landscape. The journey ahead calls for a delicate balance between financial prudence, developmental impact and long-term vision.”

The strong foundation being laid on quality infrastructure, both physical and social, will greatly help India to accomplish the objective of Viksit Bharat.

(The author is former Chairman & Managing Director of Indian Overseas Bank)