{"id":16776,"date":"2023-08-21T00:00:00","date_gmt":"2023-08-21T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/21-08-2023\/india-to-de-risk-infrastructure-development\/"},"modified":"2023-08-21T00:00:00","modified_gmt":"2023-08-21T00:00:00","slug":"india-to-de-risk-infrastructure-development","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/21-08-2023\/india-to-de-risk-infrastructure-development","title":{"rendered":"India to de-risk Infrastructure Development"},"content":{"rendered":"

\n<\/p>\n

India to de-risk Infrastructure Development<\/u><\/span><\/span><\/span><\/h1>\n
Syllabus: GS1\/ Urbanization, GS2\/ Government Policies & Interventions\u00a0<\/strong><\/span><\/span><\/span><\/p>\n
In News<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
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The triad of PM Gati Shakti, Project Monitoring Group (PMG) and public private partnerships (PPP) forms the backbone for accelerated infrastructure development .<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n
About the infrastructure development\u00a0<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
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Traditional methods of infrastructure expenditure:\u00a0 <\/strong><\/span><\/span><\/span><\/span>Traditionally, <\/span><\/span><\/span><\/span>public capital expenditure on the creation of public utilities<\/strong><\/span><\/span><\/span><\/span> has had only a limited assessment of risks and financial returns.<\/span><\/span><\/span><\/span>\n
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The risk spectrum of infrastructure development is broad and spans <\/span><\/span><\/span><\/span>political, administrative, regulatory <\/strong><\/span><\/span><\/span><\/span>and <\/span><\/span><\/span><\/span>market-based adversities<\/strong><\/span><\/span><\/span><\/span>.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n
Changed approach: <\/strong><\/span><\/span><\/span><\/span>India is moving from sole <\/span><\/span><\/span><\/span>reliance on public Capital expenditures<\/strong><\/span><\/span><\/span><\/span> to incorporating <\/span><\/span><\/span><\/span>private investment<\/strong><\/span><\/span><\/span><\/span> for infrastructure development.<\/span><\/span><\/span><\/span>\n
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The Indian government has <\/span><\/span><\/span><\/span>encouraged private and foreign investment<\/strong><\/span><\/span><\/span><\/span> through various promotional measures, such as:<\/span><\/span><\/span><\/span>\n
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A liberal FDI policy,\u00a0<\/span><\/span><\/span><\/span><\/li>\n
Ease of Doing Business measures like a National Single Window System, fiscal incentives, etc.<\/span><\/span><\/span><\/span><\/li>\n
The establishment of agencies like Invest India, among others.\u00a0<\/span><\/span><\/span><\/span><\/li>\n
A range of investment de-risking measures have also been introduced, leveraging technology, an integrated approach in planning, rationalized risk-sharing mechanisms, etc.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n
India\u2019s triad of investment de-risking: <\/strong><\/span><\/span><\/span><\/span>The PM Gati Shakti National Master Plan, Project Monitoring Group and Public Private Partnerships form a triad of investment de-risking.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n
PM Gati Shakti National Master Plan<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
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Geographic Information System (GIS) platform: <\/strong><\/span><\/span><\/span><\/span>PM Gati Shakti seeks to revolutionize infrastructure development through a <\/span><\/span><\/span><\/span>\u2018whole of the government\u2019 approach:<\/strong><\/span><\/span><\/span><\/span> a digital <\/span><\/span><\/span><\/span>Geographic Information System (GIS)<\/strong><\/span><\/span><\/span><\/span>-based platform and an institutional arrangement.\u00a0<\/span><\/span><\/span><\/span>\n
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This initiative aims to develop plans for<\/span><\/span><\/span><\/span> integrated multimodal infrastructure <\/strong><\/span><\/span><\/span><\/span>for the efficient transportation of goods and people.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n
Data-driven decision-making: <\/strong><\/span><\/span><\/span><\/span>By bringing together various ministries and departments on a single digital platform, PM Gati Shakti enables data-driven decision-making for <\/span><\/span><\/span><\/span>project planning and implementation<\/strong><\/span><\/span><\/span><\/span>.\u00a0<\/span><\/span><\/span><\/span>\n
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More than 38 ministries\/departments of the central government, 28 states and eight Union territories are already part of it.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n
Network Planning Group (NPG):<\/strong><\/span><\/span><\/span><\/span>\n
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Planning stage:\u00a0<\/strong><\/span><\/span><\/span><\/span>\n
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The traditional process of inter-ministerial consultation at the planning stage of projects has been substituted by a <\/span><\/span><\/span><\/span>collaborative evaluation at the national level<\/strong><\/span><\/span><\/span><\/span> by a Network Planning Group (NPG) to foster synchronized decision-making and reduce administrative risk. <\/span><\/span><\/span><\/span>Land acquisition risk, common in infrastructure development,<\/strong><\/span><\/span><\/span><\/span> is also minimized by using the planning tools available on the GIS platform.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n
Implementation stage:\u00a0<\/strong><\/span><\/span><\/span><\/span>\n
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At the implementation stage, the project is subject to another de-risking mechanism in the form of the Project Monitoring Group, which also has an administrative set-up and digital dashboard. This <\/span><\/span><\/span><\/span>operates as a special cell <\/strong><\/span><\/span><\/span><\/span>in the government\u2019s Cabinet Secretariat.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n
Multimodal connectivity: <\/strong><\/span><\/span><\/span><\/span>PM Gati Shakti also emphasizes multimodal connectivity to<\/span><\/span><\/span><\/span> economic nodes and cargo hubs<\/strong><\/span><\/span><\/span><\/span>.\u00a0<\/span><\/span><\/span><\/span>\n
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This<\/span><\/span><\/span><\/span> enhances the commercial viability <\/strong><\/span><\/span><\/span><\/span>of network projects as well as the infrastructure or manufacturing units connected to it.\u00a0<\/span><\/span><\/span><\/span><\/li>\n
Implementation risk to the extent foreseen at the planning stage, is minimized through the PM Gati Shakti mechanism.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
Project Monitoring Group<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
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The Project Monitoring Group takes up<\/span><\/span><\/span><\/span> issues related to Central and state-level ministries\/departments <\/strong><\/span><\/span><\/span><\/span>for <\/span><\/span><\/span><\/span>quicker resolution<\/strong><\/span><\/span><\/span><\/span>.\u00a0<\/span><\/span><\/span><\/span>\n
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This includes clearances, permissions, land acquisition, grants of right-of-way\/use, licensing or leasing needs, and forest and environmental clearances, apart from law-and-order and contractual issues, etc.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n
Thus far, this mechanism has<\/span><\/span><\/span><\/span> resolved a multitude of issues<\/strong><\/span><\/span><\/span><\/span> related to various projects, both public and private.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n
Public Private Partnerships<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
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The PPP model is another mechanism for an equitable and rational distribution of risks and rewards between public authorities and private partners.\u00a0<\/span><\/span><\/span><\/span><\/li>\n
Over the past three decades, PPP in India has evolved from <\/span><\/span><\/span><\/span>being merely an extra budgetary resource <\/strong><\/span><\/span><\/span><\/span>for project financing to a robust tool, attracting private capital along with state-of-the-art technologies and best practices in infrastructure development.\u00a0<\/span><\/span><\/span><\/span>\n
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After 1991, this mechanism led to the<\/span><\/span><\/span><\/span> infusion of private capital <\/strong><\/span><\/span><\/span><\/span>amounting to <\/span><\/span><\/span><\/span>about \u00e2‚\u00b968 trillion with over 9,200 infrastructure projects<\/strong><\/span><\/span><\/span><\/span>.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n
The last decade has clocked an almost equal number of projects, worth about 40% of the total PPP investment so far.<\/span><\/span><\/span><\/span><\/li>\n
\u00a0This growth is significant and can be attributed to de-risking measures.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n
Way ahead<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
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Intensifying these measures is likely to boost investor confidence and attract further investments, laying the foundation for a more efficient and resilient logistics ecosystem, a sine qua non for the greater integration of India\u2019s economy with global value chains.\u00a0<\/span><\/span><\/span><\/span><\/li>\n
India\u2019s joining a global club of the 10 most efficient logistics ecosystems would be incidental to it.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n
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Daily Mains Question<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n
[Q] <\/strong><\/span><\/span><\/span><\/span>The PM Gati Shakti National Master Plan, Project Monitoring Group and Public Private Partnerships form a triad of investment de-risking. Analyse.<\/span><\/span><\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
\u00a0<\/p>\n
<\/body><\/html><\/p>\n","protected":false},"excerpt":{"rendered":"
India to de-risk Infrastructure Development Syllabus: GS1\/ Urbanization, GS2\/ Government Policies & Interventions\u00a0 In News The triad of PM Gati Shakti, Project Monitoring Group (PMG) and public private partnerships (PPP) forms the backbone for accelerated infrastructure development . About the infrastructure development\u00a0 Traditional methods of infrastructure expenditure:\u00a0 Traditionally, public capital expenditure on the creation of […]<\/p>\n","protected":false},"author":1,"featured_media":16262,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[76],"class_list":["post-16776","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editorial-analysis","tag-gs"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/09\/5961236images.jpg","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/16776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=16776"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/16776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/16262"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=16776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=16776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=16776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}