New Delhi, July 25 — India is betting big on infrastructure-led growth and the world is starting to take notice, a new report has said, adding that Prime Minister Narendra Modi’s government has spent more than a decade attempting one of the most ambitious economic transformations in modern history.
The report from World Finance says that from freight rail and green energy to manufacturing and maritime trade, India is charting a truly transformative path.
When a container is hoisted ashore at Jawaharlal Nehru Port in India, it is placed aboard a high-capacity freight train running from Mumbai to the industrial cities of Dadri and Khurja in Uttar Pradesh 1,500 kilometres away. The container is lifted off a day later, much faster than in many other countries, including America.
“India has electrified 100 percent of its network, which is right up there with Switzerland, one of the jewels of railroads. By comparison, the UK can claim 37 per cent rail electrification and America just one per cent,” says the article.
In the last six years, Indian Railways has been adding over 15 kilometres every single day.
“The result is that today India boasts no less than 70,000 kilometres of electrified broad-gauge rail that is part of a grand plan to modernise all its vital systems – transport, energy and shipping – under the government of Prime Minister Narendra Modi,” the article says.
The reforms are seeing results.
According to Australia’s Treasury, the economy forged ahead at an annual rate of between 6.5 and seven percent during PM Modi’s first 10 years in power and “maintained its position among the world’s fastest-growing major economies despite a significant contraction in 2020 due to the pandemic.”
The International Monetary Fund (IMF) predicts a “rosy longer-term outlook with a similar growth rate persisting all the way through to 2035”.
Moreover, as economists explain, demonetisation gave a massive boost to cashless payments and, more importantly, for the long run, in the intervening years the tax base has widened.
“The government followed up by overhauling a confusing system of local consumption taxes with the introduction of a centralised goods and services tax,” says the article.
The PM Modi government also set an audacious target for an all-electric transport sector by 2030, a deadline that outdoes even China’s ambitions.
Called FAME (Faster Adoption and Manufacturing of Electric Vehicles in India), the programme was designed to start with rickshaws and move on to commercial vehicles, most of which are little two and three-wheelers, and then buses. Cars would come last.
“To help along the transition, manufacturers were awarded tax breaks to build cars without batteries; these would be available in battery-exchange stations where the swap would take about two and a half minutes. The idea was that the subsidised battery-free vehicles would cost up to 70 percent cheaper than with batteries. A lot of automotive companies could see the potential, including Honda and Piaggio,” said the report.
Notably, the Khavda renewable energy park, covering an area five times the size of Paris, will produce 30 gigawatts of green energy from high-efficiency solar modules and hybrid solar-wind systems.
“Run by Indian group Adani Green Energy, it is due for completion as early as 2029, when it will power over 16 million homes,” the report mentions.
The government has a target of providing 500 gigawatts of non-fossil capacity and five million tonnes of green hydrogen that will be used to clean up the steel and other heavy industries. All this is due to happen by 2030.