Fast-tracking projects will give India an advantage, particularly as China remains largely closed to the outside world and businesses increasingly adopt the “China plus one” policy, which involves looking for other nations to expand in or source from, in order to diversify their businesses and supply chains.
In India, one in four infrastructure projects exceed their projected expenditure, and half of all projects are delayed. Technology, according to Prime Minister Narendra Modi, is the answer to these enduring and well-known impediments.
The Modi administration is building a digital platform that integrates 16 ministries as part of a 100 trillion rupee ($1.2 trillion) megaproject called PM Gati Shakti, which is Hindi for “strength of speed.” The website will provide businesses and investors with a one-stop shop for design of projects, seamless approvals and easier estimation of costs.
“The mission is to implement projects without time overrun and cost overrun,” Amrit Lal Meena, special secretary of logistics in the ministry of commerce and industry, said in an interview in New Delhi. “Global companies choosing India as their manufacturing centre is the objective.”
Fast-tracking projects will give India an advantage, particularly as China remains largely closed to the outside world and businesses increasingly adopt the “China plus one” policy, which involves looking for other nations to expand in or source from, in order to diversify their businesses and supply chains. Despite having a shaky infrastructure that deters many investors, Asia’s third-largest economy offers talent pools of mostly English-speaking professionals in addition to inexpensive labour.
“The only way to compete with China, apart from the fact there are political requirements of countries to move away, is to be as competitive on the cost as you can be,” said Anshuman Sinha, a partner at Kearney India who leads transport and infrastructure practices. “Gati Shakti is about making it easier to have a flow of goods and manufactured components across the length and breadth of the country.”
The key pillars of the project are identifying new production clusters that don’t exist today, and linking those sites seamlessly to the nation’s railway network, ports and airports, Sinha said. “If you peel the layers of Gati Shakti, it’s made up of identifying nodes and strengthening the logistics network connecting those nodes.”
India has to use technology to cut red tape in order to restart its stalled infrastructure projects.
According to Meena, of the 1,300 projects that Gati Shakti’s portal now manages, roughly 40% were delayed because of problems with land acquisition, forest and environmental permissions, leading to cost overruns.
At least 422 projects had some flaws, and the site fixed 200 of them.
According to a government organisation promoting investments in India, under Gati Shakti, the government will, for instance, utilise technology to ensure that a freshly built road isn’t dug up once more to lay down phone wires or gas pipelines. According to the government agency Invest India, the strategy calls for modelling infrastructure projects after what China accomplished between 1980 and 2010 or what Europe did after World War II to improve the country’s “competitive index.”
“Today’s India is committed to investing more and more to develop modern infrastructure and it is taking every step to ensure projects do not face roadblocks and get delayed,” Modi said in a speech last year inaugurating the programme. “Quality infrastructure is the key to kick-start several economic activities, and create employment on a large scale. Without modern infrastructure, all-round development cannot happen in India.”
The Ministry of Statistics and Programme Implementation’s website has data that, in fact, shows how delayed and over-budget projects are harming the country’s economic recovery in the wake of the pandemic. India had a total of 1,568 projects in May, of which 721 were delayed and 423 cost more to complete than originally estimated.
Since taking office in 2014, Modi has increased infrastructure expenditure in an effort to boost the economy and generate new jobs after it was severely damaged by an aggressive surge of Covid-19 infections. He’s had some success thus far.
While Samsung Electronics Co. constructed the largest mobile phone factory in the world in the nation in 2018, Apple Inc. currently intends to start producing the iPhone 14 in India roughly two months after the device is first released out of China. Local company Ola Electric Mobility Pvt has committed to constructing the largest electric scooter manufacturing in the world.
According to Meena, the government also uses the Gati Shakti platform to identify infrastructure deficiencies in first- and last-mile connectivity.
According to him, it has prioritised 196 projects to close gaps and improve port connectivity for the transportation of coal, steel, and food. The government’s $106 billion Bharatmala plan, which aims to build 83,677 kilometres (52,005 miles) of roads by 20202, is being used by the road transport ministry to design 11 greenfield projects.
“There is further focus on modern warehousing, digitization of process, skilled manpower and reduction in the logistics cost,” Meena said. “For any manufacturer, choosing India as a manufacturing destination would be a sought after decision.”