Fast Tracking Infra Development

Gati Shakti is a digital backbone on which infrastructure projects planned by the government under the ₹110 trillion National Infrastructure Plan (NIP) will be implemented by 2025. It provides an institutional framework for implementation, and a monitoring and support mechanism for providing multimodal connectivity.
Vinod Behl

At a time when as many as 438 infrastructure projects, each worth ₹150 crore and above, have incurred long delays with cost overrun of ₹4.3 lakh crore, the recently launched Gati Shakti National Master Plan that aims to prevent wasteful delays, may well serve as a tool to fast track infrastructure development, which holds the key to the growth of real estate as well.

The Gati Shakti digital portal, spearheaded by the Department of Promotion of Industry and Internal Trade, brings together 16 ministries, including railways and roads, for integrated planning and coordinated implementation of infra projects, and putting them on fast track by breaking silos in logistics.

As part of its strategy, Gati Shakti will incorporate different infra schemes such as Bharatmala, Sagarmala and inland waterways together with textile and pharma clusters, defence and industrial corridors, electronic parks as well as food parks, fishing clusters, and agricultural zones to boost logistics and provide world-class infra facilities.

The sheer scale of the Gati Shakti Plan can be gauged from its 2024-25 targets. The highway capacity is to be increased to 2 lakh routes km while cargo handling by the railways will be scaled up from 1200 mt in 2020 to 1600 mt. Under Gati Shakti, aviation is set to get a big boost with 200 new airports, heliports and water aerodromes. Power transmission network will go up to 454200 circuit km. Renewable energy capacity will be increased to 225GW, up from 87.7 GW, along with completion of 17000 km of gas pipelines by FY ‘25.

The plan will involve 11 industrial parks and two defence corridors with a total investment of ₹20,000 crore. The other highlights include 197 food parks and agro processing centres and 38 electronics manufacturing clusters with a production target of ₹15 lakh crore.

High logistics cost has been responsible for ramping up the cost of real estate and infrastructure projects by way of a hike in construction material cost. Infrastructure and real estate experts opine that Gati Shakti will boost last mile connectivity and bring down logistics cost with integrated planning and by reducing implementation overlaps. They believe that Gati Shakti may well bring down logistics cost from 13% to 8%, and this 5% reduction in logistics cost would amount to a saving of ₹20 lakh crore. Citing a study by the Reserve Bank of India (RBI) and the National Institute of Public Finance and Policy (NIPFP), Amitabh Kant, CEO, Niti Ayog, looks at a 2.5 - 3.5 times multiplier effect on the country’s GDP.

Vipula Sharma, Senior Director (Ratings) at Brickwork Ratings, is of the opinion that the holistic approach of Gati Shakti will bring out efficiencies and governance in the system through a single approach for multifaceted projects and avoidance of duplication of efforts and cost. Experts are also of the view that the Gati Shakti plan will boost investments in infrastructure. Shubham Jain, Senior VP and Head Infrastructure and Real Estate at Cred Avenue believes that it will help the industry to arrive at informed capital investment decisions by looking at the connectivity network, infra facilities, and overall ecosystem present at the target locations.

Niranjan Hiranandani, Vice Chairman, NAREDCO and Managing Director, Hiranandani Group, talks about the real estate boost accruing from Gati Shakti. “Like the government’s flagship programme of Housing for All being the key to meeting the country’s housing needs, Gati Shakti will positively impact real estate growth. Also, by being a driver of massive infrastructure development, Gati Shakti, in turn, will create an unparalleled opportunity for real estate growth.”

All said and done, the challenge of Gati Shakti is about its efficacy in terms of effective monitoring and implementation of infra projects. Though at the central level, the Gati Shakti portal will help government departments to track the progress of infra projects in real time and at a single centralised place, the challenge lies at the states’ level. It remains to be seen how effectively the states’ portal gets integrated with the Gati Shakti portal to have the desired impact of this mega plan on infra development.
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