Govt Should bolster Infra development to rekindle GDP growth: Niranjan Hiranandani-NAREDCO
--By Niranjan Hiranandani President (National) NAREDCO
The Indian economy has been impacted by policy, taxation and industry reforms over nearly the past half a decade; the resultant slowdown till beginning of 2020 was further impacted by the COVID-19 pandemic lead to the series of ‘Lockdowns’ - with the result that the Indian economy effectively, ground to a halt. As extensions of the lockdown happened, two aspects were impacted the most: migrant labour reverse-migrated back to their villages, and the supply chain also seriously impacted. The Indian Prime Minister put it in perfect perspective when he said it was about ‘Jaan’ and then, ‘Jahaan’. The importance of saving ‘Life’, followed by saving ‘Livelihood’.
From June, as the Indian economy begins the process of restarting activities, India is in a situation not faced ever – never before has the economy ground to a halt; no one can guess or understand the restart process and what it will entail. Should it be small enterprise units (MSME, Micro etc) who should be the first to restart, with the big players joining in along a calibrated timeline – or should the Government take the lead, and jump-start the economy, with infrastructure projects and the positive impact of the same on stakeholders leading the economic revival.
Historically, we have seen large infrastructure projects lead to economic revival. When these projects enhance connectivity, they also have a multiplier effect on economic growth with savings in time taken to transport resulting in efficiencies, in turn saving money. In the calibrated restart scenario, a push for large infrastructure projects by both, the Centre and state governments, will not just provide jobs and business opportunities for material suppliers, but will also be important from the perspective of revenues for the states and the centre. Plus, the enhanced connectivity will open up vast new hinterland locations, for real estate development, construction effectively supports 250-plus industries and service sectors.
From a Mumbai and MMR perspective, the trans-harbour MTHL link (Sewree-Nhava); the coastal road, the elevated connector from Worli to Sewree are three separate projects which in effect, dove-tail to create fast connectivity linking extended and western suburbs through the Bandra-Worli sea-link and elevated connector till Sewree across the trans harbour link to Nhava, saving time and making access to Pune and through Alibaug to the Konkan a smooth drive. Factor in the economic growth potential, in terms of jobs created, material suppliers getting business opportunities as also revenue that will accrue to the authorities – it certainly looks like a win-win scenario. In the near future, economic growth prospects as a result of this connectivity will be visible in form of ‘green shoot’ business opportunities which will open up, the multiplier effect of additional jobs which will be created having a positive effect across the economy.
This is just Mumbai and the MMR, consider similar projects across India – Sagarmala, Delhi Mumbai Industrial Corridor (DMIC), development of the Bullet Train route as also various projects being taken up by National Highway Authority of India (NHAI). All of these, and such similar infrastructure projects, offer positives like job creation, generating business for material suppliers as also the long term benefit of saving in time in terms of transport schedules resulting in saving of money. Plus, the multiplier effect on the economy: this can be a win-win scenario which is just right in the present challenged times.
In Maharashtra, the Mumbai Nagpur expressway as also the realignment of the Mumbai Goa highway offer similar potential for economic growth. The expressways have potential for setting up new townships in green-field locations, which would be powered by logistics and light industrial as the economic drivers. The post-COVID world will see ‘work from remote locations’ with the variant of ‘work from home’ leading to growth in demand for homes in peripheral areas of metropolitan regions all over the country. In Mumbai’s MMR, the upcoming metro network as also new rail lines like the Panvel-Karjat passenger section will again, enhance connectivity.
The real estate growth in all the peripheral areas will have multiplier effect across the economy; the jobs created will result in increased consumption, effectively driving economic growth through increased sales creating more business opportunities. This is a success story which can be repeated across the nation – and I hope it happens soon. That will provide the perfect kick-start to the economic engine, and ensure that ‘Atmanirbhar Bharat’ (self-reliant India) becomes a reality at the earliest.