With PM Gati Shakti Push, India's Physical Infrastructure Compares Favourably To That Of China: Morgan Stanley

Global investment bank Morgan Stanley has highlighted the transformative impact of India's PM Gati Shakti scheme on the nation's infrastructure development in it latest report.

Launched in October 2021 by Prime Minister Narendra Modi, the initiative has integrated 16 key ministries to coordinate multi-modal connectivity projects across highways, railways, ports etc.

According to the report, India has scaled up its infrastructure strongly over the last decade, with higher investment that is also better targeted and potentially more productive.

India's infrastructure investment is set to increase steadily, from 5.3 per cent of GDP in FY24 to 6.5 per cent by FY29.

This growth trajectory suggests a robust 15.3 per cent compound annual growth rate (CAGR), with projected cumulative spending reaching USD 1.45 trillion over the next five years. The report emphasizes that targeted investments are expected to enhance productivity and support sustained economic growth.

"We expect India's infrastructure investment to steadily increase from 5.3 per cent of GDP in FY24 to 6.5 per cent of GDP by FY29. Indeed, this implies that infrastructure investments are expected to register a strong 15.3 per cent CAGR, resulting in cumulative spending of USD 1.45 trillion over the next five years. In our view this will help to lift the investment rate, leading to a sustained period of high productive growth," the report said.

The report also states that "contrary to popular perception, India's physical infrastructure scale already compares favourably to China's when viewed in the context of GDP differential."

The report cites the World Bank's Logistics Index Report, 2023, which records that the average Container Dwell Time in Indian ports was three days compared to four days for countries like the UAE and South Africa, seven days for the USA, and 10 days for Germany.

According to the Morgan Stanley Report, initiatives under PM Gati Shakti are yielding results.

Under the PM Gati Shakti scheme so far, cumulatively 101 projects worth Rs 60,900 crore have been identified for implementation in the ports and shipping sectors.

As of April 2023, 26 projects valued at Rs 8,900 crore have been completed, with an additional 42 projects worth Rs 15,340 crore under development, and 33 projects valued at Rs 36,640 crore under implementation.

The Ministry of Ports, Shipping, and Waterways (MoPSW) is actively collaborating with the ministries of highways and railways to enhance port connectivity and streamline logistics operations.

The Sagarmala programme, aimed at enhancing port-led development, has seen significant progress, with 220 projects worth Rs 1.12 lakh crore completed and 231 projects valued at Rs 2.21 lakh crore currently under implementation. Meanwhile, 351 projects worth Rs 2.07 lakh crore are at the evaluation stage.

Additionally, the development of National Waterways seeks to promote greener, more efficient transport options for both cargo and passenger traffic.

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