The government will roll out from April 1 a well-planned, comprehensive and foolproof mechanism to implement integrated infrastructure development worth ₹7.5 lakh crore for financial year 2022-23 under the PM GatiShakti initiative, Prime Minister Narendra Modi announced Monday.
Addressing a webinar on the vision of GatiShakti and its convergence with Union Budget 2022, Modi said: “PM GatiShakti has a major role in improving infrastructure efficiency… Infrastructure planning, implementation and monitoring will get a new direction from PM Gati Shakti. This will also bring down the time and cost overrun of the projects.”
The PM Gati Shakti - National Master Plan was announced last year with an aim to break departmental silos and bring in more holistic and integrated planning and execution of projects with a view to address the issues of multi-modal and last-mile connectivities.
In her Budget speech on February 1, Finance minister Nirmala Sitharaman announced GatiShakti as one of the four priorities of economic development. According to the 2022-23 Budget, the plan encompasses seven engines for economic transformation -- roads, railways, airports, ports, mass transport, waterways and logistics infrastructure.
“The projects pertaining to these seven engines in the National Infrastructure Pipeline (NIP) will be aligned with the PM GatiShakti framework. The touchstone of the master plan will be world-class modern infrastructure and logistics synergy among different modes of movement – both of people and goods – and location of projects. This will help raise productivity, and accelerate economic growth and development,” Sitharaman said.
{{/usCountry}}“The projects pertaining to these seven engines in the National Infrastructure Pipeline (NIP) will be aligned with the PM GatiShakti framework. The touchstone of the master plan will be world-class modern infrastructure and logistics synergy among different modes of movement – both of people and goods – and location of projects. This will help raise productivity, and accelerate economic growth and development,” Sitharaman said.
{{/usCountry}}The government has already announced a ₹111 lakh crore NIP for the next four to five years and GatiShakti will help 16 ministries in integrated execution of these projects.
During the webinar, Modi sought suggestions from participants on how to effectively implement the initiative in the coming financial year as envisaged in the Budget.
Stressing on the integrated approach, the Prime Minister said the plan also aims to reduce logistics costs in India. “Even today, the logistics cost in India is considered to be 13-14% of the GDP (gross domestic product). This is more than other countries. PM GatiShakti has a huge role in improving infrastructure efficiency,” he said.
According to commerce and industry minister Piyush Goyal, PM Gati Shakti has the potential to reduce logistics costs from 13% to 8% in the next four to five years, which may lead to savings of about ₹20 lakh crore for an economy of $5 trillion, as reported by HT on October 15, 2021. The commerce and industry ministry is the nodal point for implementation of the PM GatiShakti.
Modi said a unified logistic interface platform (ULIP) provided in this Budget will help reduce the logistics cost. “...24 Digital Systems of six ministries are being integrated through ULIP. This will create a National Single Window Logistics Portal which will help in reducing the logistics cost,” he added.
The central government is making huge capital investments to spur growth and create employment, which requires an integrated approach, the Prime Minister said. “In the year 2013-14, the direct capital expenditure of the government of India was around ₹2.5 lakh crore, which has increased to ₹7.5 lakh crore in the year 2022-23,” he added.
Modi suggested that both state governments and private investors resort to this idea for better planning and reducing compliance burden. PM GatiShakti will ensure true public-private partnership in infrastructure creation, from infrastructure planning to development and utilisation stage, he said.
India, which aspires to become a $5 trillion economy by 2025, is adopting several innovative methods for ease of compliance and using new age technology to reduce time and cost overrun. PM GatiShakti is part of the same initiative.
Consultancy firm EY India in its latest edition of Economy Watch said: “Successful implementation of such a plan would provide infrastructural support for achieving high-medium-term growth. It would be useful to fully integrate the already existing six-year NIP framework with the new GatiShakti initiative.”