Thursday, September 24, 2020
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Infrastructure development under Modi government is rapidly transforming India

According to an affidavit submitted by UPA government in 2013, 50% of all National Highways constructed over 30 years since 1980 were built under just 5 years of BJP (Vajpayee’s) government. With BJP government in India since 2014, there’s again increased focus on infrastructure to improve connectivity, stimulate trade and push economic growth.

Project Bharatmala is building 35,000 km highways across 16 states, including 9,000 km of economic corridors. With planned completion by 2022, this is intended to improve connectivity, enable faster movement of goods, create 22 million jobs and decrease supply chain costs from the current average 18% to 6%. This Bloomberg report calls out India for building new roads at “breakneck pace”.

Sagarmala Project is modernizing 12 major ports and 185 minor ports along the entire 7,500 km long coastline of India. With planned completion by 2022, it would stimulate trade, create 10 million new jobs, provide logistic costs savings of over Rs. 35,000 crore per year and potential GDP increase by 2%. Similar port modernization since 1978 at Shenzhen, China had helped create seven million jobs and city’s GDP grew by 50 times to $180 billion.

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For intra-city commute, while China has built more than 3,600 km of Metro network in 39 cities, India has operational metro in only 8 cities covering a total track length of 370 km. The current urban development ministry is working with state governments on expanding Metro networks across 24 new cities including Ahmedabad, Bhopal, Guwahati, Indore, Kanpur, Kozhikode, Nagpur, Patna, Pune, Vijayawada and Varanasi among others.

For inter-city commute, Bullet Train (High Speed Rail) on Mumbai-Ahmedabad route is being built through a 508 km track which includes 7 km undersea tunnel. Planned to be operational by 2022, bullet trains traveling at 320 km/h will reduce travel time between business-critical cities of Mumbai and Ahmedabad from 7 hrs to 2 hrs. In addition to Mumbai-Ahmedabad route, five more high speed corridors along diamond quadrilateral are being evaluated. With these additional corridors, High Speed Rails in India will cover more than 10,000 km.

One of the world’s largest infrastructure project, Delhi Mumbai Industrial Corridor (DMIC) is creating 23 industrial hubs, 24 smart cities, two power plants, six airports, two ports and a six-lane expressway stretching 1,500 km connecting the industrial cities of Delhi and Mumbai. Once completed, time to transport goods from Delhi factories to shipping ports will reduce from 14 days to 14 hours. The project is expected to create 25 million jobs over 7 years, with Phase 1 planned to be completed by 2019.

GIFT (Gujarat International Finance Tec City) is being developed as a large business district between Ahmedabad and Gandhinagar. As India’s first smart city with world-class infrastructure, it will have features like Automated Waste Collection System (AWCS), District Cooling System (DCS), underground cables for electric supply, smart parking, smart transport and public wi-fi. GIFT is developed as a Special Economic Zone (SEZ) with tax incentives for attracting Banks, Stock Exchanges, I.T. companies and campuses of renowned global universities. Planned to be completed by 2023, it is expected to generate one million jobs including direct and indirect employment. Spread across a construction area of 8.5 million square meters, it is significantly larger than Tokyo’s Shinjuku district (1.6 million square meters) and London’s Docklands (1.1 million square meters) (source: TheEconomicTimes report here)

“Navi Mumbai International Airport” is being constructed with capacity to handle 80 flights per hour and 10 million passengers per year. First phase is planned to be operational by end of 2019. Subsequent phases will add additional passenger handling capacity. This will significantly reduce the pressure on Mumbai International Airport which is currently choked due to capacity constraints.

In addition, UP has received approval for Jewar International Airport in Noida and construction is planned to begin in 2019. With 40 to 50 million passengers per year capacity, it will reduce the load on New Delhi International Airport and help promote tourism in nearby UP (Mathura, Vrindavan etc.)

Under Regional Connectivity Scheme (RCS), the central government has granted twenty-four airports and helipads across the country out of which 22 airports are for the North-East region (and 2 in J&K). As part of “Look East” policy, Arunachal Pradesh will have airports in nine locations, Assam will have five, Manipur will also get five, Meghalaya, Tripura, and Sikkim will have one airport each. The government wants to connect the remote areas of India with each other through air as improved connectivity is the key to economic growth of every state.

Economic corridors and highways; metro trains and bullet trains; seaports and airports – all translate to better connectivity, faster movement of goods and people, faster trade and rapid economic growth. As quoted by Finance Minister Arun Jaitley, between last year of UPA government and current year of present government, the infrastructure expenditure has increased by 134% and the road sector itself has witnessed an increase by 189%. Modi government deserves appreciation for its effort in building a new India.

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Shashank Goyal
IIM-A alumnus, Software Sales Professional, Writes about business, economy and politics; Passionate about numbers, facts and analysis Tweets @shashankgoyal01

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