NEW DELHI: Indian Prime Minister Narendra Modi on Wednesday launched a 100 trillion-rupee ($1.3 trillion) national infrastructure plan to pull the country back from a sharp economic decline worsened by the coronavirus disease (COVID-19) pandemic.
When Modi came to power in 2014, he announced he would make India a $5 trillion economy. But growth has been stalled ever since, especially after the pandemic broke out. In the last fiscal year that ended in March, India’s economic output fell by a record 7.3 percent.
The national infrastructure program dubbed Gati Shakti, which means momentum, aims at boosting the productivity of industries, agriculture and other sectors in Asia’s third-largest economy.
“Development is not possible without quality infrastructure, and the government has now resolved to develop it in a holistic manner,” Modi said during the launching ceremony. “Gati Shakti will ensure that there will be no loss of time and money due to lack of infrastructure.”
Gati Shakti is India’s most ambitious infrastructure plan so far.
“If you look at the $1.3 trillion for the infrastructure campaign, it is more than three times that of India’s total budgetary allocation,” Prof. Pravakar Sahoo of the New Delhi-based economic think tank Institute of Economic Growth told Arab News.
“Never before such a huge amount has been earmarked for infrastructure. Earlier, 3 to 4 percent of the budgetary allocation would go to infrastructure,” he said. “What is salient about the project is that it interlinks all the infrastructure projects of different departments and puts them under one nodal agency. It will make India one market.”
When he announced the project on India’s Independence Day on Aug. 15, Modi said it would create millions of jobs.
“This will boost the demand and create economic activities,” Sahoo said. “Whenever there is a crisis in the economy, the biggest infrastructure investment takes place.”
While he admitted that under Modi’s government infrastructure growth has seen a “great jump,” with India now building 35 km of roads daily, compared with 8 to 9 kilometers in the past, Sahoo said it was still unclear how Gati Shakti would be financed.
“The question is where the government will get the funds to finance such an ambitious project,” he said. “It’s going to be very difficult.”