Global investment bank Morgan Stanley has praised the PM Gati Shakti scheme, highlighting its success in accelerating India’s infrastructure development and enhancing multi-modal connectivity across highways, railways, and ports. This initiative has significantly contributed to the country’s economic growth.
Over the past decade, India has made significant strides in scaling up its infrastructure. Investments have not only increased but are also more strategically targeted and potentially more productive.
Morgan Stanley predicts that India’s infrastructure investment will rise steadily from 5.3% of GDP in FY24 to 6.5% of GDP by FY29. This represents a strong 15.3% compound annual growth rate (CAGR), leading to cumulative spending of USD 1.45 trillion over the next five years. Such investment is expected to boost the overall investment rate, fostering a sustained period of high productive growth.
Contrary to popular belief, India’s physical infrastructure is already comparable to China’s when considering the GDP differential. The World Bank’s Logistics Index Report 2023 highlights that the average container dwell time at Indian ports is three days, compared to four days in the UAE and South Africa, seven days in the USA, and ten days in Germany.
In addition, the turnaround time at Indian ports has improved to 0.9 days, outperforming countries like the USA (1.5 days), Australia (1.7 days), and Singapore (1.0 days). In FY24, the overall cargo growth at Indian ports was 7%, with major government-owned ports handling 53% of the cargo.
Launched by Prime Minister Narendra Modi in October 2021, the PM Gati Shakti National Master Plan aims to integrate 16 ministries, including Railways and Highways, on a digital platform for coordinated planning and implementation of multi-modal connectivity projects.
This transformative approach is designed to drive economic growth and sustainable development, with roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure acting as “7 engines” to propel the economy forward.
The Morgan Stanley report indicates that the PM Gati Shakti scheme is already showing positive results. So far, 101 projects worth Rs 60,900 crore have been identified for implementation in the ports and shipping sectors.
As of April 2023, 26 projects worth Rs 8,900 crore have been completed, 42 projects worth Rs 15,340 crore are under development, and 33 projects worth Rs 36,640 crore are under implementation.
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The Ministry of Ports, Shipping, and Waterways (MoPSW) is also working on a comprehensive port connectivity plan in collaboration with the highways and railways ministries. Under the Sagarmala program, 220 projects worth Rs 1.12 lakh crore have been completed, 231 projects worth Rs 2.21 lakh crore are under implementation, and 351 projects worth Rs 2.07 lakh crore are currently being evaluated.
Moreover, national waterways are being developed as a more efficient and environmentally friendly mode of transport for both cargo and passengers, further enhancing the country’s infrastructure landscape.
Morgan Stanley’s report indicates the significant progress and potential of India’s infrastructure development under the PM Gati Shakti scheme, paving the way for sustained economic growth and improved connectivity across the country.
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