INTRODUCTION

The Indian Prime Minister, Narendra Modi has envisioned India as a 5 trillion-dollar economy
by 2025.

The focus on “Make in India" and the success of the manufacturing sector totally depends on the
thrust provided by the backbone of our Infrastructure. Therefore, our Prime Minister has placed
the utmost importance to the development of world-class infrastructure. Owing to the multiplier
effect, increased investment in infrastructure would not only create demand in the economy but
would also account for sustainable and equitable growth.

National Infrastructure Pipeline and Gati Shakti

Modi's ambitious 100 lakh crore Gati Shakti Master Plan is backed by the National
Infrastructure pipeline project. The Gati Shakti project aims to boost the manufacturing sector
and increase exports by making local products globally competitive. The ways in which the NIP
supports Gat Shakti Master Plan are the following:

 With substantial charging and on-road traction infrastructure for e-vehicles, improved
road connectivity to the most isolated places is possible.

 World-class stations and a fully integrated rail network with access to isolated areas, with
a safety focus

 Airports and related infrastructure to enable international and regional connectivity to

achieve passenger and cargo traffic, as envisioned by the National Civil Aviation Policy
2016
  Ports and waterways infrastructure to reduce logistic time and cost for foreign and
domestic trade, as envisioned by the Sagarmala National Perspective Plan 2016.

Logistic Costs and Strategy

According to our hon’ble Prime Minister, there is extraordinarily little coordination

between the different means of transport. Gati Shakti is believed to improve upon this aspect and
will break the silos. This will lead to reduction of travel time for masses and increase in the
productivity of industries as well.

As of now, the supply chain and logistic cost part hover around 13-14% of the total costs
for Indian firms, while the global standard is at 8%. This makes exports uncompetitive vis a vis
Chinese goods. The Gati Shakti Master Plan aims at reducing this figure by breaking silos and
through optimization of the necessary infrastructure. A report from Niti Aayog and Rocky
Mountain Institute (RMI) states that India can reduce its logistic cost by 4% of the country's
GDP and achieve 10 gigatons of CO2 emission savings by 2030 through a clean and cost-
effective mode of goods transportation.

Gati Shakti will offer multi-modal connectivity to 1,200 plus industrial clusters and two
defense clusters in a bid to reduce logistic costs and provide better connectivity. Some of the
identified industrial clusters under the Gati Shakti project that would help to reduce costs in this
regard are:

 Defense corridors - 2

 Food processing parks and Agri clusters - 197

 Pharmaceutical and medical devices cluster - 109

 Fishing clusters and harbors - 202

  Mega textile parks cluster - 90

A comprehensive strategy has been adopted for the development of roads with 100
percent FDI being allowed in the road sector. NHAI is planning to monetize roads majorly
through two modes - one is toll operate transfer that is TOT, and the other is Infrastructure
Investment Trust that is InvIT.

Projects under existing flagship schemes of different ministries such as Bharat mala,
Sagarmala, Udaan, expansion of railway network, inland waterways, and Bharat Net come under
the purview of Gati Shakti. The major goals of the Gati Shakti Master Plan can be summarized
as follows:

Focus Areas

 Raise a global profile of local manufacturers

 Possible new future economic zones

 Need to increase production and exports

 Holistic infrastructure for the economy

 Diversification in energy and power sector

 Agricultural tech for farmers

Targets

 Laboratories at the block level

  Hospitals to get oxygen plants

 End the development divide between villages and cities

 75 Vande Bharat trains connecting various parts of India

 Every North East capital to have railway connectivity

 North East to get South Asia connectivity

 Tech infrastructure in the Agricultural sector

 Integrated approach in infrastructure creation

 Manufacture world-class products with new-age technology

CHANNELS OF EMPLOYMENT GENERATION AND MULTIPLIER EFFECT

Channels of Employment Generation

The Gati Shakti Master Plan will open employment opportunities in a lot of sectors as follows:

Immediate Employment Channels Generated

  Roadways: Labours, Contractors, Asphalt and Concrete industries, Heavy Machinery and
equipment, Steel Industry (for flyovers and bridges)

 Railways: Labours, Contractors, Steel Industry, Rail Coach Manufactures.

 Inland Waterways: Shipbuilding Industry, Labour, Equipment, Power Generation

 Logistic Solutions: Commercial Automobiles, Heavy Vehicles

 Construction: Labour, Contractors, Brick Industry, Glass Industry, Cement and Steel
Industry

Possible Employment Channels Post-Development and End Use

 Manufacturing – A boost in the manufacturing sector is expected as it is one of the major

aims of the project. This will in turn, lead to increase in demand of labour, raw material,
power and will help boost the allied and complementary industries.

 Glass Industry, Heavy Machinery and Equipment

 Logistic Solutions – Commercial Automobiles

 Development of SEZs- More companies will be interested to expand their operations due
to benefits from SEZs. The infra development will enable the identification of future
SEZs. And this will lead to significant amounts of workforce demand; heavy machinery,
power supply and management will also be needed.
Multiplier Effect

The capital expenditure multiplier for India is estimated at 2.45 for central government
and 2 for state governments (RBI, 2019). This shows that an increase in capital expenditure by
the central and state governments by one rupee each crowd in private investment induces a more
than proportionate increase in national income with benefits accruing over some periods. This is
also known as the periodic multiplier which is equal to the reciprocal of marginal propensity to
save in a model Keynesian economy. The capital expenditure multiplier can be expressed as
follows:

Now, the initial investment in the infrastructure of 100 trillion will amount to an increase
of 245 trillion in real GDP. Keynes postulates that the lower-income group has a higher marginal
propensity to consume out of each rupee. As it is expected that lower-income group members
will be the majority recipients of the benefits of the funds spent on the infra projects as they are
more likely to be recruited on contractual employments compared to their white-collared
brethren, the actual value of the multiplier may be higher than the average value of the multiplier
quoted above because the lower-income group will spend more out of each additional rupee due
to their higher pent-up demand.

EMPLOYMENT OPPORTUNITIES IN THE NEW AND EMERGING SECTORS

The following new and emerging sustainable sectors are believed to be providing employment
opportunities in the near future:

1. Renewable sector: rooftop solar power generation, manufacturing of solar panel

modules, inverters and converters and end-use components for LED bulbs and energy-
efficient pumps.

2. Energy generation sector- ocean thermal energy conservation (OTEC), the offshore
wind energy industry, marine biology, and biotechnology
 3. Waste management: Municipal solid waste management and Water waste management

4. Green transport: manufacture, service, and maintenance of green mobility systems like
electric vehicles and non-motorized transport.

While many policies recognize the importance of sustainable practices, implementation

has always been difficult. For urban job creation, an integrated approach spanning multiple
sectors and government departments is required, as are innovations in the design of these
interventions themselves. The funding and establishment of links with the private sector for
corporate social responsibility funds and fellowship programs for green jobs is a critical issue.
This strategy can also serve as a springboard for the employment of the new workforce generated
by green skilling.

Green job perceptions also need to be improved. Those associated with sectors such as
waste management and sanitation, for example, have a negative perception in society and may
not align with job seekers' aspirations. One approach to overcoming these could be to introduce
value-added training in addition to skill-building. To meet the aspirations of applicants, English
language training, communication skills, computer literacy (including for trainees' children), etc.
could be added to the modules.

CHALLENGES AND RECOMMENDATION

1. Decision lag, Investment lag, Gestation lag: As the Gati Shakti Plan has just been
announced by our honorable PM, there will be a decision lag consisting of the time taken
to create the implementation plan. This process can be streamlined if the pre-planning
phase is given strong importance. Setting up the committees and selecting the panel
members efficiently will ensure the reduction of decision lag.

Now, investment lag entails the delay between the creation of the implementation
plan and the actual disbursement of funds along with the initiation of actual development.
Whereas gestation lag includes the delay between the end of construction and the time
from when actual use can be started. The reflection of the benefits from the development
on national income gets delayed and less effective as the duration of lags increase. The
reduction of these lags by ensuring an exceptionally good pre-planning and planning
phase can lead to the elimination of bureaucratic pathologies like red tape, imperialism,
conflict, duplication, and waste.
2. Resistance from farmers for land acquisition and the amount of compensation: The
compensation amount for land acquisition should be decided not only on the prevailing
market rate but also after incorporating the fact that a piece of farmland generates a flow
of income to generations of a particular farming household. This can only be done by a
detailed and broad consultation with all the stakeholders.

3. Environmental Impact: The need to replace current infrastructure and build new
infrastructure to accommodate new ways of working and living for an expanding
population is paramount. Economic development and the transition to a low-carbon
economy, drives demand for infrastructure investment as well. Such demand leads to
significant infrastructural developments in both developing and developed countries.
Although, the new project is aimed at enhancing sustainability and overcoming climatic
challenges, at the same time such a project could have costs on the environment both
during construction and use. Environmental implications of this project could be in terms
of pollution (air, water, noise, soil, etc.), carbon emissions, greenhouse gas emissions,
damage to biodiversity and ecosystems, raw materials, and resources.

Sustainability impacts of the project might include of effects on local

communities in terms of earning, their livelihood, long-term benefits from the
infrastructure, resilience to extreme climatic adversities. Recognizing that diverse groups
may have different viewpoints on whether social implications should be addressed within
the scope of the project could help to alleviate these concerns. Consultation with
subcommittee members on strategies to lessen such impacts by involving diverse groups,
as well as confirmation of associated environmental and sustainability impacts.

4. Stagflation: There may be stagflation due to delay in actual increase in GDP after
injection of government funds in the infra project, there may arise a situation where
production is slow to increase but more money is already in circulation creating a
 stagnant manufacturing sector with a rising price level. This is a classic case of
stagflation which has been experienced by a lot of developing nations after World War II.

The only way to avoid stagflation is to implement the infrastructural development

project in a time bound manner and simultaneously sensitizing the financial institutions
including banks to ensure speedy disbursement of investment funds to the investors so
that investment can be translated to actual project implementation in no time.

5. Project Management: The Gati shakti plan, distribute funds for various departments like
roadways, railways, ports, inland waterways, etc. all under the umbrella of a single
infrastructure plan- this is where there may be ambiguity and interdepartmental conflict
may arise. Let us take the example of a road being built in Jharkhand, which comes
across a river on which a bridge is to be made and the river is also being used by the
Indian water authorities. This is where multiple authorities of equal stature raise voices,
which leads to nowhere. There is a conflict of interest and the question arises as to who
will take the lead to resolve issues and how the project will get implemented smoothly.

Unless responsible allocation takes place, this is a recurring issue. Executing

projects infrastructurally is easy but coordinating them is a mammoth task. Project
management is a specialty of its own and there is a need to professionalize it better in the
Government departments. The need also arises for an infrastructure fund and a
monitoring department that will act as the liaison among various departments like port,
inland water, rail, roadway, etc. and enable the various departments to work collectively
as one.

OPPORTUNITIES FOR BLUE AND GREEN ECONOMY

Green Economy
 If we break the words Gati shakti, it loosely translates to mobility and energy. Gati
encapsulates the entire transportation sector and Shakti refers to the entire energy sector. Gati
shakti Master plan is built upon the National Infrastructure pipeline project (NIP), which was
started in 2020 and would go on till 2025. Out of an outlay of 100 trillion, NIP has earmarked 36
and 24 percent for energy sector and transportation sector, respectively. The difference between
NIP and Gati shakti revolves around the fact that the latter focuses on projects that use more
green energy and subsequently cause less pollution and harm to the environment vis a vis
traditional fossil fuel-led energy and transportation causes.

The COVID-19 situation has only served to highlight India's failing infrastructure.

Moreover, about half of the country is vulnerable to catastrophic climate-related calamities. India
urgently needs to improve its infrastructure, and while doing so, it can help the environment.
Infrastructure investments should increase in the country, resulting in more robust, well-
resourced, and resilient infrastructure.

Climate mitigation and adaptation are paramount as a part of the Government’s strategy
to reach net-zero emission status. Gati Shakti helps India's case in the forthcoming meeting in the
UN Climate Change Conference of the Parties (COP26) in Glasgow in October 2021.
Apocalyptic air pollution, dire water shortages, rising temperatures, and extreme weather events
have already pushed us to the verge of an environmental disaster. Furthermore, it should be
noted that the world requires India's leadership to meet the 2-degree Celsius global warming
target. In short, India's growth must be environmentally friendly. To effectively use scarce
natural resources, India must adopt a resource-efficient, low-carbon development path.

The United Nations Environment Programme (UNEP) defines the green economy as one
‘that results in improved human well-being and social equity, while significantly reducing
environmental risks and ecological scarcities. Green economy strategies tend to focus on the
sectors of energy, transport, sometimes agriculture, and forestry, while the blue economy focuses
on fisheries sectors and marine and coastal resources. Both incorporate strategies to address
climate mitigation and adaptation.
 By 2022, India intends to have 175 GW of installed renewable energy capacity, with 100
GW coming from solar, 60 GW from wind, 10 GW from small hydro, and 5 GW from biomass-
based power projects. Grid security necessitates renewable energy forecasting. Accurate RE
forecasting is challenging, however, because of a lack of quality data and underdeveloped
forecasting systems. The accuracy of the forecast will determine a significant percentage of
generation integration. India's solar R&D and production capabilities must be strengthened and
upgraded to achieve low-cost manufacturing and hence lower capital expenditures, as well as to
leverage on its inherent advantages in the solar sector.

Blue Economy

For India, the blue economy entails diverse economic opportunities that play an equally
key role in generating and sustaining livelihoods. With a 7,500-kilometer-long coastline
spanning nine coastal states, four union territories (UTs) - including two island UTs, 12 major,
and 200 minor ports, India's blue economy supports 95 percent of the country's business through
transportation and contributes to the country's GDP. India is also the world's third largest fish
producer and second largest aquaculture fish producer (NFDB 2020a)3. As a result, all sectors of
the blue economy have the potential to employ a large workforce and have done so for many
decades, at least in fishing, aquaculture, fish processing, marine tourism, shipping, and port
activities.

Participation in new sectors such as offshore wind, marine biology, biotechnology, and
other activities such as ship building and ship breaking is increasing dramatically. Among these,
the fisheries sector alone employs 16 million fisherfolk and fish farmers at the primary level, and
twice that number further up the value chain.

The shipping sector is also a key source of income in the blue economy, as India has one
of the largest merchant shipping fleets among developing countries, ranking 17th in the world.
The number of Indian seafarers working on Indian and foreign flagged vessels surpassed two
lakhs in 2018, representing a 35 percent increase over the previous year
Table 1: Population dependent on fisheries for livelihood among coastal states in India
(according to Blue Economy Working Group Report, Economic Advisory Council to the
Prime Minister 2020)

State Fishing Villages Fishing Families Fisherfolk

Population

Andhra Pradesh 555 (16.2) 163,427 (18.7) 605,428 (14.9)

Gujarat 247 (7.2) 62,231 (7.1) 336,181 (8.3)

Tamil Nadu 573 (16.7) 192,697 (22.0) 802,912 (19.8)

Odisha 813 (23.7) 114,238 (13.1) 605,514 (14.9)

Karnataka 144 (4.2) 30,713 (3.5) 167,429 (4.1)

Kerala 222 (6.5) 118,937 (13.6) 610,165 (15.0)

Goa 39 (1.1) 2,189 (0.3) 10,545 (0.3)

Maharashtra 456 (13.3) 81,492 (9.3) 386,259 (9.5)

West Bengal 188 (5.5) 76,981 (8.8) 380,138 (9.4)

Note: Figures in bracket show the shares in percentage

Seaports are also a significant source of employment. Unlike in India's major ports,
employment in smaller ports has grown over time, from 1,933 in 2003 to 19,102 in 2017. (Blue
Economy Working Group Report 4). Smaller ports have surpassed major ports in terms of cargo
volume growth over the last five years. This is due to their more strategic locations, modernized
infrastructure, and more efficient operations.
Table 2: Employment in non-major ports of India

State/UTs 2003 2008 2014 2019

Andhra Pradesh 109 69 1195 2278

Tamil Nadu 110 62 35 35

Puducherry 79 33 485 245

(Pondicherry)

Karnataka 99 55 124 53

Kerala 316 191 683 262

Maharashtra 173 153 117 53

Gujarat 2662 1718 1723 1056

Goa 166 146 144 136

A&N Islands 477 452 641 623

Lakshadweep 217 - 111 -

Daman & Diu 22 22 10 6

Odisha - 118 759 361

Total 4430 3019 5097 5108

Source: Ministry of Shipping, Road Transport and Highways

The shipbuilding industry has an immense potential in India. These industries are also
moving toward sustainability by using recyclable or biodegradable materials in ship construction,
ensuring energy efficiency, and even resource efficiency. Initiatives such as the 'Green
Initiatives Programme' and the 'Green Ports Project' are aimed at achieving sustainability
and have a significant potential for job creation throughout the value chain. Furthermore,
encouraging indigenization and self-sufficiency in the industry may result in more job
opportunities in the sector.

Given the growth trajectory of the Indian logistic sector, which has been boosted by
industrial demand, ports will play an even larger role in the future. Currently, the sector employs
semi-skilled or low-skilled workers, but as the business environment evolves, special managerial
skills, as well as strong interpersonal and analytical abilities, will be needed.

Offshore regions have tremendous potential in the form of offshore wind, waves, ocean
currents, including tidal currents, and thermal energy, which can help meet the growing demand
for renewable energy. However, the development of offshore wind energy in India is in its
preliminary stages, owing primarily to technological constraints and a scarcity of skilled labor.
Regional-level skill development programs can achieve both deployment and skilled workforce
for operations and maintenance.

LINKS

1. https://www.zeebiz.com/india/news-national-master-plan-rs-100-lakh-cr-integrated-
infrastructure-development-programme-gati-shakti-to-be-launched-soon-minister-
gadkari-says-164171

2. https://timesofindia.indiatimes.com/business/india-business/100-lakh-crore-gati-shakti-
for-connectivity-boost-to-be-unveiled-in-september/articleshow/85753551.cms

3. https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=19959
4. https://www.teriin.org/article/blue-economy-ocean-livelihood-opportunities-india

5. https://scroll.in/article/936135/creating-green-jobs-could-help-address-both-
unemployment-and-environmental-degradation-in-india

6. https://thewire.in/economy/india-must-rebuild-its-economy-keeping-a-green-focus

7. https://www.teriin.org/projects/green/pdf/National_SPM.pdf

8.