Business & Investment

Gati Shakti is ambitious and has a thorough master plan.However, coordination between ministries must be done correctly.

For example, lack of access to integrated industrial parks and textile parks, and poor connectivity to ports and airports can operate them well below their potential. It’s also nice to be able to see all your projects in one place.

The plans and coordination that Prime Minister Gati Shakti is trying to bring to the country to build a multimodal infrastructure is welcome. The importance of better logistics cannot be fully emphasized. Given the cost and shortage of capital and time, it is imperative to provide facilities (industrial corridors, electronic parks, inland waterways, agricultural areas, pharmaceutical clusters), but they cannot be duplicated. And you need to maximize the return on your investment. Data on about 1,700 infrastructure projects suggest an average cost overrun of 20% and a time overrun of more than 3 years. Commerce and Industry Minister Piyush Goyal says the goal should be to reduce logistics costs from the current 13% to 8% of GDP. This could lead to a large savings of Rs 200,000.

For example, lack of access to integrated industrial parks and textile parks, and poor connectivity to ports and airports can operate them well below their potential. It’s also nice to be able to see all your projects in one place. Digital dashboards on GIS platforms can also make a difference in the speed of monitoring and therefore the speed of action. However, it is limited to the effective use of information by each department or person in charge, to quickly clear the project through appropriate evaluation, to quickly remove obstacles, and to resolve disagreements. You can borrow some practices from other countries with similar mechanisms.

The Master Plan promises to handle every aspect of the plan, from working with all stakeholders to ensuring last mile connectivity. This is required to be achieved by establishing an institutional mechanism consisting of experts from 16 infrastructure ministries (Network Planning Group (NPG)). However, this process consists of several layers. For example, a project approved by the NPG will be sent to an authorized secretarial group led by the Cabinet Secretary for further scrutiny and approval. The baton has also been handed over to the Department for Promotion of Industry and Internal Trade (DPIIT), which is the authority of the node and monitors the progress of the project. This was previously done by NITI Aayog and DEA and the Line ministries.

Keeping all the information related to your implementation in one place simplifies your responsibilities. Coordination between ministries was by no means a strength. The turf battle between the various ministries has stalled the project. It is also important to reform the bidding criteria for awarding government work. These take some commercial aspects into account, but they do not always adequately assess their technological capabilities. The practice of giving work to the lowest bidder, L1 Syndrome, is not always the best way to go. This is because cost overruns due to delays can undermine the benefits of the first low estimate. Promoters with better equipment to undertake the project should be encouraged.

It’s no secret that India’s indifferent infrastructure conditions are making business difficult. Exporters who need to meet strict deadlines are particularly inconvenienced. Infrastructure improvements have the potential to drive private sector investment. According to CMIE data, the start of a new project from September 2020 to June 2021 totaled Rs 480 million, compared to $ 4 in the December 2019 quarter alone. 40,000 rupees. Capital needs to be used efficiently to encourage private sector investment.

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Gati Shakti is ambitious and has a thorough master plan.However, coordination between ministries must be done correctly.

https://www.financialexpress.com/opinion/gati-shakti-is-ambitious-and-the-masterplan-thorough-however-need-to-get-interministerial-coordination-right/2351919/ Gati Shakti is ambitious and has a thorough master plan.However, coordination between ministries must be done correctly.

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