Gati Shakti

Prime Minister Narendra Modi launched the PM Gati Shakti Master Plan, a project worth one hundred lakh crore rupees, on the auspicious day of India’s 75th Independence Day. Our government has drawn out a comprehensive infrastructure development strategy that includes a multimodal connectivity plan with the goal of coordinating the planning and execution of infrastructure projects to decrease logistics costs and accelerate growth.

I’ll use a popular example to try to convey the essence of this initiative. We’ve all witnessed how our local corporation or government maintains and develops roads. After completing the road, it is dug up again within some days for the installation of a plumbing system or maintenance work, among other things. This occurs not only on a small scale in a town or city, but also in huge undertakings, causing delays in both time and budget. Because our work is done in silos, there is a large gap between our planning and implementation. Gati Shakti is attempting to address these and other challenges by developing a unified platform that will allow for the easy planning and management of all infrastructure projects.Let’s take a closer look at why this project is important, what Gati Shakti is, and how it will impact the entire DNA of government administration & what are the implementation difficulties?

The relevance of infrastructure development, according to the RBI, is that it not only improves capital’s marginal productivity, which increases return on investment, but it also has a multiplier effect on the entire GDP. It helps to drive industries including cement, metal, auto, and electrical by increasing labor demand, construction equipment, and supplies. It improves commodities transit, lowering overall logistics costs and improving service. History demonstrates how countries, such as the United States and China, have transformed themselves through infrastructure development and become economic superpowers. India is now taking moves in the same direction, which will provide opportunities for growth.

Second, Gati Shakti is a GIS (geographic information system)-based platform that will connect all our country’s commercial and industrial clusters. Roads, railways, communication cable networks, oil and gas pipelines, water supplies, and other infrastructure will be connected to the platform. A fully integrated system that will serve as a project design and management platform that will aid in both planning and monitoring. The lacking links between several ministries that implement projects without consulting their related components would be fully removed. If a project is being rolled out, it will now have a well-rounded system of approvals thanks to the Gati Shakti platform, which will not affect any other project in the future. This platform will be taught to ministries and government officials. A national planning group coordinated by the Ministry of Commerce and BISAG (Bhaskaracharya National Institute for Space Applications and Geoinformatics) will bring expert officers to represent the ministries and assist them with efficient platform usage. No solo project will be sanctioned without proper funneling after the adoption of this platform, and NPG will be involved in every clearance.

Third, the Ministry of Infrastructure encompasses a total of 15 ministries, all of which have a significant impact on every part of our economy. The government will be able to efficiently control all these departments by leveraging the power of growing technology. This improvement will not only result in a more efficient system, but it will also revolutionize the way government functions. The entire administration could have a good impact since a transparent system will steer growth, potentially giving more power to those working on the ground.

Finally, the issue is to combine the massive amounts of data generated by all these ministries, as well as to train individuals on how to use and execute the system. The goal of developing a digital system for project management is to provide transparency, and in order to do so, everyone will have to work together to develop the system.

This initiative by our government, in my opinion, has the potential to transform India into a manufacturing powerhouse and is one of the most important stages toward our objective of becoming a $5 trillion economy. This can become a foundation for future development & if correctly implemented, a system of this magnitude can attract more companies to our country and put us on the path to growth.

Gati Shakti Master Plan

Author
Pranav Dorle
Editor-TJEF

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Budget Impact Analysis – Auto Sector

By Dhanyakumar M H

Expectations from Industry:

  • Cut in corporate tax from 30 to 25%
  • Implementation of the vehicle scrappage scheme
  • Incentives for hybrid and electric car production to be extended
  • Removal of connection between size of car and tax
  • Push for infrastructure to offer a quality road in the long run

What Budget has to offer?

  • Personal Income tax:
    • Increase in zero income tax slab from 2.5 lakh to 3 lakh
    • Reduction in income tax from 10% to 5% for income between 2.5 to 5 lakh

Increases in household disposable income. Provides a boost to first-time auto buyer preferably two-wheeler or entry level car.

  • Infrastructure development:
    • Better the infrastructure in the country, is an incentive and encouragement for Auto Industry
    • Budget is seen as a pro-development and this would boost the sales of MHCV, HDCV and heavy equipment
  • Goods and Service Tax:
    • Implementation of GST is confirmed, but there was no message to Auto industry regarding the removal of the link between size and taxation.
  • Rural Income and Agriculture:
    • Mission of doubling farmer income would help increase the disposable income
    • Interest waiver for 60 days due to the impact of demonetization is a welcome move
    • Expected to see a 4.1% increase in Agri output

Increase in rural income would help two wheelers, tractor and entry level car manufactures. It may also help an LCV segment of commercial vehicles.

  • Market Reaction:¬†Advance in stocks
    • Bajaj Auto, Hero Motocorp and TVS Motor
    • M&M, Maruti Suzuki, Eicher Motors, Tata Motors and Ashok Leyland
    • Escorts and VST Tillers
    • Auto Ancillaries are also shown an advancement in stock prices

Conclusion:

Overall the budget has not met the expectation of the auto industry and there was no surprise as well. But the move towards reducing personal income tax and push for rural India is welcomed. As this would increase the disposable income, industry expects an increase in sales of two wheelers, tractors, entry level cars and finally MHCV & HDCV because of push to infrastructure development. Industry is hoping to see more revival post GST implementation as there will be zig-zag in tax structure.