India's Infrastructure Development

India’s Infrastructure Development

Recent reports on the collapse of several under-construction bridges in Bihar highlight issues in quality control and project execution within India’s infrastructure sector.

Table of Contents

Context

Recent reports on the collapse of several under-construction bridges in Bihar highlight issues in quality control and project execution within India’s infrastructure sector.

Introduction

Infrastructure is a key driver of the Indian economy.
Making India a developed nation by 2047 is linked to improvements in its infrastructure sector.
Initiatives like PM Gati Shakti, National Logistics Policy, and Smart Cities Mission support this goal.
In line with this vision, the government increased its capital expenditure allocation to ₹11.11 lakh crore (3.4% of GDP) in the 2024 Budget, indicating its commitment to infrastructure development.
However infrastructure in India faces certain challenges and there is a need for improved project management practices to sustain India’s high growth trajectory.

Challenges within the Infrastructure Sector

Time Delays and Cost Overruns: 431 infrastructure development projects, each with investments of ₹150 crore or more, faced cost overruns totaling ₹4.82 lakh crore as of December 2023 (according to a report by the Ministry of Statistics and Programme Implementation).
- Additionally, 779 delayed projects were noted, with delays ranging from 1 to over 60 months. The average project delay was three years.
Multiple Clearances: Industrial and commercial projects in India require numerous clearances, leading to delays from conception to commissioning.
- Urban infrastructure projects suffer from poor project management, lack of comprehensive planning by local bodies, and insufficient capacity in local self-government institutions.
Lack of Project Planning: Inadequate time and expertise devoted during the planning stage result in further delays and increased expenditure.
Traditional Management Practices: Outdated project management techniques fail to incorporate modern tools for real-time data management and analysis, reducing the efficiency of project execution.
Inadequate Human Resources: There is a shortage of skilled workers, engineers, and managers, which impacts the timely and effective development of social infrastructure projects like healthcare and education.
Land Acquisition: Acquiring land for infrastructure projects is difficult due to resettlement issues and disputes over compensation, making it a time-consuming process.

Government Initiatives for Infrastructure Development

PM Gati Shakti: The National Master Plan under PM Gati Shakti aims to bring various government ministries and departments together on an integrated platform.
- It uses a GIS-based ERP portal to monitor real-time progress and set benchmarks for departments.
- However, the success of the initiative also depends on project quality during implementation and the integrity of overseeing teams.
National Infrastructure Pipeline (NIP): A massive ₹111 lakh crore initiative aimed at providing world-class infrastructure across sectors like energy, roads, railways, and urban development by 2025.
- It focuses on increasing investment from both public and private sectors.

Significance of the National Infrastructure Pipeline (NIP) for Infrastructure Creation

● Achieving India’s growth potential: The NIP is crucial for realising India’s goal of a $5 trillion

● economy by 2024-25, as infrastructure is a major constraint to growth.

● Boosting investor confidence: The NIP can enhance investor confidence by providing a pipeline of well-prepared and monitored projects, reducing the risk of non-performing assets (NPAs).

● Creating fiscal space: Improved infrastructure can stimulate economic activity, increase government revenue, and allow for more productive public spending.

● Ensuring better project implementation: The NIP can help ensure that infrastructure projects are adequately prepared, reducing the likelihood of delays and cost overruns.

● Strengthening rural infrastructure: The NIP includes significant investments in rural infrastructure, such as irrigation and rural roads, to support agricultural development.

● Improving connectivity: The NIP will enhance connectivity across India, especially in rural areas, through investments in road and railway infrastructure.

Smart Cities Mission: It is a flagship initiative launched by the Government of India in 2015 to transform 100 Indian cities into smart cities
- Also it aims to promote sustainable and inclusive urban development by focusing on citizen-friendly services, smart solutions, and better infrastructure.
National Logistics Policy (NLP): It is a comprehensive framework aimed at improving India’s logistics infrastructure and creating an integrated logistics ecosystem.
- Reducing logistics costs: The policy seeks to reduce the cost of logistics from 13-14% of GDP to a global average of 8% by 2030.
- Improving logistics performance: The NLP aims to improve India’s ranking in the Logistics Performance Index, striving to be among the top 25 countries by 2030.

Major Plans of Indian Infrastructure

● Roads – Bharatmala Pariyojana:

○ Phase I aims to develop 34,800 km of National Highways with a focus on corridor-based development.

○ Scheduled to conclude by 2027-2028, covering 31 States/UTs and over 550 districts.

○ The plan includes building 22 new greenfield expressways to enhance transportation infrastructure.

● Airports – UDAN (Ude Desh Ka Aam Nagarik):

○ Launched in 2016 to boost regional air connectivity, particularly to small towns.

○ In its first 5 years, UDAN launched 425 new routes and 58 airports, serving over one crore passengers.

○ The 2023-24 Budget allocated INR 1,244.07 Cr to UDAN, doubling the previous year’s budget.

○ Plans include reviving 22 airports and an additional 50 airports, heliports, water aerodromes, and landing grounds.

● Railways:

○ Major projects include the Mumbai-Ahmedabad Speed Rail Corridor and the Chenab bridge in Jammu & Kashmir (world’s highest railway bridge).

○ As of December 2023, 61,508 km of Broad Gauge network is electrified.

○ 35 Vande Bharat Express trains have been introduced, serving 247 districts, with 6 more trains to launch soon.

○ Indian Railways aims to become a Net Zero Carbon Emitter by 2030, with 211 MW of solar plants and 103 MW of wind power plants commissioned by October 2023.

● Ports – Sagarmala:

○ India’s ports have achieved a “Turn Around Time” of 0.9 days, better than countries like the USA (1.5 days) and Singapore (1.0 days), according to the World Bank’s LPI Report 2023.

○ Sagarmala promotes port-led development by leveraging India’s 7,500 km coastline and 14,500 km of potentially navigable waterways.

○ India’s total port capacity is expected to increase from 2,600 MTPA to over 10,000 MTPA by 2047.

○ Waterway cargo increased by 7.49% from April to November 2023, with plans to operationalise 23 waterways by 2030.

Way Forward

Current project management practices need modernization.
- The integration of real-time data management, analysis tools, and global best practices should be implemented in public sector and public-private partnership projects to improve efficiency.
Program Management Approach is needed, as exemplified by the industrial corridor development projects such as Shendra-Bidkin in Aurangabad, Maharashtra.
Proposal to set up a Project Management Agency to ensure effective project management.
An agency should be established to conduct professional courses in project management, similar to the structure of the Institute of Chartered Accountants of India or chartered engineers in other countries.
- Such an institution would foster professional ethics, responsibilities, and monitoring capabilities in project execution, improving the overall infrastructure sector’s performance.

International Examples

● Countries like the United Kingdom, China, and Saudi Arabia have adopted robust systems for managing large-scale projects.

● For instance, the UK’s Infrastructure and Projects Authority emphasises processes for project completion, while China and Saudi Arabia have set up agencies to oversee end-to-end project deliveries.

Conclusion

With significant taxpayer money allocated to infrastructure, India must prevent time and cost overruns and ensure the structural integrity of its projects. Implementing a robust program management system will help build future-ready infrastructure and support India’s goal of becoming a global economic powerhouse by 2047.