Modi to snatch factories from China with a digital portal for end-to-end production in India
Infrastructure projects in India are delayed 50% of the time, and one in four are over budget. The Prime Minister, Narendra Modi, has decided that technology is the solution to these never-ending and notorious bottlenecks.
His 100-trillion-rupee (USD$1.2 trillion) mega project called PM Gati Shakti – which is Hindi for the strength of speed – is a digital platform working with 16 ministries being developed by his administration. This portal will offer an end-to-end solution to businesses and investors, for the design of projects, seamless approval processes, and easier cost estimations.
“The mission is to implement projects without time overrun and cost overrun,” said Amrit Lal Meena, the special secretary of logistics in the ministry of commerce and industry, said when he was interviewed in New Delhi recently. “Global companies choosing India as their manufacturing center is the objective.”
With China largely closed to outside work, India’s fast-tracking projects would often be the plus-one in the China-plus-one policy many companies are adopting. This is where global companies are finding other countries to expand in or source from. This would diversify their businesses and supply-chain processes.
Rickety infrastructure in Asia’s economy keeps many investors away, even though it is the third-largest economy in Asia and offers cheap labor by workers who often speaks English.
“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 cost as you can be,” said Anshuman Sinha, a partner at Kearney India. Kearny is a leader in 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 include identifying new production clusters, that are not in existence already. Then to seamlessly link those sites 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 logistics network connecting those nodes.”
The reduction of red tape is crucial for relieving India’s clogged infrastructure and doing this through technology is vital. Of the 1300 projects, the Gati Shakti portal is currently overseeing, almost 40% were delayed. These were delays in land acquisition, forest and environmental clearances, and the resulting cost overruns because of the delays, according to Meena. Out of the 422 projects with delays and issues, the portal had already resolved 200.
Under the Gati Shakti platform, the government won’t, for example, dig up newly constructed roads to lay phone cables or gas pipelines. The plan is envisaging the modeling of infrastructure similar to how Europe did after the Second World War or what China did between 1980 and 2010 raising the nation's “competitive index,” according to Invest India, the government agency in a statement.
Modi said in a speech at the inauguration of the program, “Today’s India is committed to investing more to develop modern infrastructure and it is taking every step to ensure projects do not face roadblocks and get delayed. Quality infrastructure is the key to kick-starting several economic activities and creating employment on a larger scale. Without modern infrastructure, all-around development cannot happen in India.”
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