Infrastructure growth ahead

Syllabus: General Studies Paper 3

Context

As India draws closer to being a $5 trillion economy, the government’s strategic initiatives to encourage the infrastructure sector is providing a boost to collective growth of the Indian economy.

Developing infrastructure

• The upgradation of real estate and infrastructure development to assist the allied industries is necessary to achieve the required momentum of economic growth in these difficult times.
• These industries play a significant role in enhancing the employment generation along with upliftment of the small and medium businesses.
• However, delays in large-scale infrastructure projects due to multiple waves of COVID-19, coupled with a nationwide lockdown, have hindered the infrastructure projects
• The vulnerability of infrastructure projects to market volatility arises from the industry’s normal protracted gestation period.
• Governments are today partnering with private players to ensure a robust approach and seamless execution of some of the marquee infrastructure projects across the country.

Further steps needed

• Comprehensive mechanism for revalidating costs and schedules: The vulnerability of infrastructure projects to market volatility arises from the industry’s normal protracted gestation period, hence the Infrastructure firms nowadays must have a very comprehensive mechanism for revalidating costs and schedules every quarter.
• Use of latest technology: Infrastructure companies need to institutionalise pull planning/ equivalent tools to review, monitor, and push the progress of the projects.
  • As the world progresses digitally, there is a need to adapt to modern technology for seamless execution. For instance, geospatial mapping; Building Information Modelling, video monitoring; 3D modelling etc.
• Robust strategy: The priority of EPC companies should be to keep track of commodity pricing, consolidate procurement across several projects, and engage in pre-bid tie-ups for niche as well as high-end supplies and services.
• Digitalisation of processes: After the pandemic, the business dynamics across sectors have been shifted to digital for the better, paving the way for a brighter digital future.
• Managing supply chain disruptions: supply chain is a major issue for construction companies due to the vast variety and quantum of raw materials and supplies required. It requires proper planning and a crisis management plan to tackle sudden uncertainties.

Conclusion

• India is bound to witness a larger infrastructure growth, with the government making infrastructure a priority for overall economic development.
• The steps like Gati Shakti initiatives would act as a significant productivity booster for the infrastructure sector.
  • It would help in overcoming the multiplicity of approvals and delayed clearances which have been big bottle necks.
  • The multiplier effect from the same would lead to faster project implementation and control cost.
  • The initiative would be as transformative for the infrastructure sector as liberalisation was in the 1990s.
• The involvement of private companies in the national infrastructure projects has the potential to help infrastructure of India to reach international standards as the possibilities are infinite.
  • The priorities should be balanced and fair contracts structured across the complete execution chain.

The Hindu Link

https://www.thehindu.com/real-estate/watch-out-infrastructure-growth-ahead/article38303563.ece

Question-How can infrastructure development help put India on fast paced economic growth trajectory. Explain.