India’s Burgeoning Infrastructure

16 Aug 2022

India has long been connected globally, since the age of the first Spice Route, and has continued to strengthen its ties with the world still. Such has the augmentation of exports been, that India’s merchandise trade deficit in March 2022 was $18.5 billion, with exports increasing by about 20% to $42.22 billion and imports increasing by 24% to $60.74 billion in April 2022. Rising like a phoenix, this truly speaks volumes about India’s potential and its resilient industry.

While global connectivity has brought home outstanding results for the industry, we need to take a hard look within. Despite beer infrastructure than what existed a decade ago, the logistical costs for manufacturers and industry can be lowered significantly by improving existing infrastructure. Infrastructure development is slowly becoming a necessity than just a sign of progress. The Indian Government, too, recognizes this need and highlighted its renewed focus on infrastructure in the country during this year’s Union Budget.

India’s basic infrastructure requirements range from roads, ports and airports for cargo movement; high-quality uninterrupted and dedicated power supply; adequate water supply to water treatment systems, sewage and waste treatment facilities. The Government’s emphasis on an Aatmanirbhar Bharat is based on the potential and the inherent strength of the country’s domestic demand.

To achieve a positive growth curve, achieving this demand along with the key growth pillars of livelihood index through meaningful employment, dignity through beer housing, sustainable development goals, and infrastructural connectivity is important. These key pillars will form the core of the envisioned sustainable growth, backed by a strong industrialization platform as the primary driver of the economy.

The industry has an important role to play in establishing the USP of India’s unique potential through its industrial corridors. Currently undertaken by the National Corridor Development Corporation of India, these industrial corridors which are being developed along with multiple multimodal transport infrastructures have the potential to propagate equitable economic and employment benefits along with sustainable urbanisation that reduces the influx from Tier-2 and Tier-3 cities.

Presently, 11 economic corridors are being implemented across the country under the National Industrial Development Corridor Program. Planned to span the length and breadth of the corridor that imbibe self-sustaining industrial and urban ecosystems, these corridors will provide residential, health, retail and entertainment facilities to spread the economic benefits to remote cities and ensure equitable economic development.

These dedicated industrial zones have been assured in abundance to both large anchor industrial tenants as well as medium to small scale industries, successfully promoting plug-and-play industrial development, combined with necessary living and commuting amenities. Such strategic initiatives will ensure diversification of industrial growth across the economic nodes, thereby boosting the logistics and supply chain sector.

Self-sustaining integrated industrial nodes would not only be catalytical for industrial growth, but also for bridging the gap between urban and rural India. Globally too, Asian countries in the last four decades have leveraged their manufacturing sector as a key driver of their economy. Countries like China, South Korea, Taiwan, etc. have witnessed a steady growth with manufacturing contributing to almost 25% of their GDPs.

One key factor that stands out as a catalyst for these economies is enhanced multimodal connectivity – an important aspect served by the Indian industrial corridors. Significant investment would be made for the development of physical infrastructure such as rail linkages, power and energy enhancement.

In fact, India’s National Infrastructure Pipeline (NIP) will invest more than $1.4 trillion into infrastructure projects by 2024-25, with the Central Government, State Governments, and the private sector sharing the capital expenditure, of which one-third expenditure will be on roads and railways.

Moreover, the National Highway Development Plan for the development of 34,000 miles is substantially complete now. 15,000 miles of roads, under the Bharatmala Pariyojana, are underway with a focus on port connectivity, economic corridors, expressways and connectivity to multi-modal logistics parks. To distribute the road freight, the National Rail Plan 2030 envisages rail freight accounting for 45% of freight through the redevelopment of 90 railway stations into major transit hubs and the development of seven high-speed rail corridors by 2030.

On the other hand, the Sagarmala initiative seeks to increase the waterways freight to 12% by 2025. The Government’s flagship program, the GatiShakti Master Plan, which intends to connect major industrial clusters, to smaller and newer economic towns, shall further allow for seamless movement of labour from one manufacturing region to another, thereby, leading to rapid urbanisation across new nodes.

Holistic infrastructure planning and development through GatiShakti would reap benefits for the Indian industry, leading to improvement in business sentiments, higher efficiencies, cost reduction and greater savings. Acting as a portal-driven integration of infrastructure schemes from 16 different ministries and State Governments, GatiShakti will bring together projects such as Bharatmala, Sagarmala, inland waterways, dry/land ports and UDAN under one umbrella.

All such pre-existing infrastructure projects have been brought together on a single platform to ensure synchronised and integrated planning, breaking the traditional approach of implementing projects in silos. Further, GatiShakti, through indigenously developed spatial planning tools, integrates more than 200 layers of GIS data. This would not only boost complementarity between projects of different ministries, such as linking rail lines with ports but also prevent geographically conflicting infrastructure.

It will also concentrate on economic zones like textile, fishing and pharmaceutical clusters, defence and industrial corridors, electronic parks, agricultural zones, etc. Usage of advanced technologies such as imagery from ISRO, and spatial planning tools are going to help build beer strategic plans. By leveraging these tools, GatiShakti would help develop a transport system that optimises cost and fuel efficiency by allowing seamless movement of goods through various modes of transport.

At the core of multi-modal connectivity, robust last-mile connectivity throughout the country is also envisaged via the Multi-Modal Logistics Parks (MMLPs). This would help overcome a major blockage for a lot of landlocked states in India that lack access to ports. It is paramount to establish connectivity to reduce transit costs and make pricing competitive for the industry that will ultimately help Indian goods compete globally.

States from Northeast India, which have so far been one of the least connected regions due to a lack of good all-weather roads, are set to be mainstreamed and well-connected by the development of multi-lane lane national highways that will link all states by 2025. As a cascading effect, MMLPs would allow for large-scale warehousing & container movement and will provide scope for value addition like sorting, grading, etc., thus reducing turnaround and incurred costs.

GatiShaki is about using modern digital tools and technologies necessary for coordinated planning and monitoring of goods and cargo movements, and that’s where logistics platforms will empower India’s trucking sector as well. India’s master plan for infrastructure will be made efficient with digitisation, soon making India move faster towards the goal of becoming Aatmanirbhar, as well as a global hub of economic activities in the coming years.

However, more than achieving the target, accomplishing the timeline is imperative. The pandemic has delivered a wide blow across departments and ministries, underlining the gaps in our healthcare systems and hindering India’s progressive plans for future growth. Having proclaimed our ambitious goal of a $5 trillion economy, it is now more crucial than ever to not just build our capacity for the industry and our rapidly growing population that can set the wheels of growth in moon, but also build them in the most optimal and timely manner.

Considering the multiplier effect, timely implementation of the infrastructure projects, especially at the current juncture, could provide a notable boost to our economy. India must look at achieving its master goals within the stipulated time frame and continue to thrust its efforts on infrastructure for a competitive industry and a competitive nation.

This article has been contributed by Anshuman Magazine, Chairman, CII Northern Region & Chairman & CEO – India, Southeast Asia, Middle East, and Africa, CBRE and first appeared in CII Northern Insights.