Current News - Indian Economy - Infrastructure

A recent official statement reveals that six infrastructure projects, involving roads and railways and amounting to Rs 52,000 crore, have been proposed for approval within the framework of the PM Gati Shakti initiative.

Key Points

• Review in 56th NPG Meeting: During the 56th Network Planning Group (NPG) meeting held on September 27; six infrastructure projects underwent assessment.
• These projects include four from the Ministry of Road Transport and Highways and two from the Ministry of Railways.
• Integrated Planning for Infrastructure: The NPG, an inter-ministerial body, conducts bi-weekly meetings to evaluate infrastructure projects.
• It follows a multi-modal approach, emphasizing coordinated efforts and comprehensive development in project areas.
• PM Gati Shakti Initiative: The PM Gati Shakti initiative aims to establish an integrated infrastructure system with the goal of reducing logistics costs.
• All logistics and connectivity infrastructure projects exceeding Rs 500 crore must go through NPG assessment and approval.
• Approval Process: Approval from the NPG is a prerequisite before projects can be cleared by the Public Investment Board (PIB) or the Department of Expenditure under the Ministry of Finance.
• The majority of projects reviewed by the group typically relate to roads, railways, and urban development.
• Role of NPG: The Network Planning Group consolidates various layers of geospatial data, combining physical and social infrastructure information with land records.
• This streamlined approach expedites planning and design phases, optimizing the impact of investments.
• Collaboration across Ministries: NPG includes representatives from multiple ministries and departments responsible for connectivity infrastructure.
• Heads of network planning divisions from these departments collaborate for unified planning and proposal integration.

On 24^th September, 2023, Indian Prime Minister inaugurated nine Vande Bharat Express trains, establishing crucial rail links between religious and tourist destinations across 11 states.

Key Points

• Expanding Rail Connectivity across India: In a virtual address, PM Modi initiated nine Vande Bharat Express trains connecting 11 states, including Rajasthan, Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Bihar, West Bengal, Kerala, Odisha, Jharkhand, and Gujarat. These additions signify a significant expansion of rail connectivity.
• Improved Features Based on Passenger Feedback: The nine new Vande Bharat trains come with enhanced features based on passenger feedback.
• These include increased seat reclination angles, optimized cushion hardness, and improved mobile charging accessibility under seats.
• The executive class seat colour has also been changed from red to blue and extended footrests and magazine bags have been added.
• Significance of Connectivity: The introduction of these Vande Bharat Express trains is a significant step toward providing modern, speedy, and comfortable rail travel to various segments of society, including professionals, businessmen, students, and tourists.

On 18^th September, 2023, addressing a long-felt need for centralized coordination among aviation regulatory authorities, Union Minister of Civil Aviation inaugurated the 'Udaan Bhawan,' an Integrated Office Complex at Delhi's Safdarjung Airport.

Key Points

• Centralized Office Complex for Aviation Regulatory Authorities: The inauguration of 'Udaan Bhawan' addresses the essential requirement of having all aviation regulatory authorities housed under one roof, fostering improved coordination.
• Enhancing Coordination among Regulatory Authorities: Regulatory bodies such as the Directorate General of Civil Aviation (DGCA), Bureau of Civil Aviation Security (BCAS), Aircraft Accident Investigation Bureau (AAIB), and Airports Economic Regulatory Authority (AERA) play pivotal roles in framing and implementing aviation sector rules and regulations.
• Launch of E-Wallet Payment Facilities: The occasion marked the launch of a pilot e-wallet facility, offering a convenient payment solution for processing fees related to regulatory approvals in the Bharatkosh portal.
• The e-wallet acts as a prepaid wallet, allowing registered users to add funds in advance, initially using NEFT/RTGS modes. Users can also generate instant receipts and challans.
• Sustainable and Modern Infrastructure: 'Udaan Bhawan,' a GRIHA-5 rated building, prioritizes sustainability and environment-friendly features.

On 17^th September, 2023, India’s Prime Minister inaugurated the first phase of the International Convention and Expo Centre (IICC), known as YashoBhoomi, in Delhi's Dwarka on his birthday.

Key Points

• Metro Line Extension: The Delhi Airport Metro Express line was extended from Dwarka Sector 21 to a new metro station named 'YashoBhoomi Dwarka Sector 25,' providing connectivity to YashoBhoomi.
• YashoBhoomi will be directly linked to the Delhi Airport Metro Express line through this new station.
• Significance of YashoBhoomi: YashoBhoomi is poised to become one of the world's largest MICE (Meetings, Incentives, Conferences, and Exhibitions) facilities.
• It covers an expansive project area of over 8.9 lakh square meters and boasts a total built-up area exceeding 1.8 lakh square meters.
• The convention centre features 15 convention rooms, including the main auditorium, a ballroom, and 13 meeting rooms with a combined capacity of accommodating 11,000 delegates.
• Notably, the main auditorium is equipped with innovative automated seating arrangements to accommodate different seating configurations.
• The ballroom, characterized by its distinctive petal ceiling, can host approximately 2,500 guests, with additional open seating for up to 500 individuals.
• YashoBhoomi also houses one of the world's largest exhibition halls, spanning more than 1.07 lakh square meters, complete with support facilities like media rooms, VVIP lounges, cloakrooms, visitor information centers, and ticketing counters.

Recently, the Department of Telecommunications (DoT) launched a scheme aimed at fostering digital inclusion and socio-economic development in rural India by acknowledging Internet Service Providers (ISPs) for their outstanding efforts in expanding Fiber-to-the-Home (FTTH) broadband connections in rural regions.

Key Highlights of the Scheme

• Recognition Criteria: DoT will identify nine ISPs under this scheme, with three falling into each of the categories A, B, and C, based on their contribution to rural FTTH connection net additions in a given year.
• Recognition Benefits: Recognized ISPs will receive a certificate, and their names will be prominently displayed on the DoT website.
• This recognition will be awarded annually, covering net additions from April to March, with the first recognition period spanning from April 1, 2023, to March 31, 2024.
• Minimum Net Addition Requirements: To qualify for recognition in each category, ISPs must meet the following minimum net addition criteria:
  • Category A: ISPs in this category should achieve a minimum of 50,000 net additions in rural FTTH connections.
  • Category B: ISPs in this category are required to achieve a minimum of 10,000 net additions in rural FTTH connections.
  • Category C: ISPs in this category must achieve a minimum of 2,000 net additions in rural FTTH connections.

Recently, India's Digital Public Infrastructure (DPI) has received accolades from the G20 Global Partnership for Financial Inclusion, a document prepared by the World Bank.

• It highlights the profound impact of DPIs in India, particularly in enhancing financial inclusion, crediting the Indian government for its transformative policies.

Key Points

• Remarkable Progress: India achieved what would have taken five decades in just six years, thanks to the Digital Public Infrastructure (DPI).
• The financial inclusion rate surged from 25% in 2008 to over 80% in the past six years, a leap shortened by up to 47 years due to DPIs.
• Ecosystem Variables: While DPIs played a crucial role, other factors like an enabling legal framework, national policies for account ownership expansion, and Aadhaar for identity verification were pivotal.

What is DPI?

• Digital Public Infrastructure (DPI) refers to a comprehensive framework of digital tools, platforms, and services that are designed to enable seamless and secure interactions between government agencies, citizens, businesses, and other stakeholders in the digital ecosystem.
• DPI is a key component of a country's digital transformation strategy and aims to provide the foundational digital infrastructure needed to facilitate various digital services and transactions.
• DPIs are interoperable, open, and inclusive systems supported by technology and provide essential, society-wide, public and private services that play a critical role in accelerating this digital transformation in an inclusive manner.

Key Elements of India's DPI Ecosystem

• Aadhaar: Aadhaar serves as a strategic policy instrument, promoting social and financial inclusion, driving public sector delivery reforms, aiding fiscal budget management, enhancing convenience, and fostering citizen-centric governance.
• Aadhaar holders can voluntarily utilize their Aadhaar credentials for private sector purposes, and private entities are not required to seek special permissions for such utilization.
• DigiYatra: DigiYatra revolutionizes travel with a Biometric Enabled Seamless Travel (BEST) experience powered by a Facial Recognition System (FRS).
• India witnessed a significant air passenger traffic volume, exceeding 188 million passengers in various airports across the country during the fiscal year 2022, including over 22 million international passengers.
• DigiLocker: DigiLocker boasts an impressive user base of 150 million individuals, storing a staggering six billion digital documents, all achieved with a modest budget of INR 50 crore over a span of seven years.
• Users can securely store a diverse range of documents, including insurance records, medical reports, PAN cards, passports, marriage certificates, school diplomas, and various other documents in digital format.
• UPI: UPI, short for Unified Payment Interface, has achieved a remarkable milestone, surpassing eight billion transactions per month and facilitating transactions worth USD 180 billion monthly, equivalent to a staggering 65% of India's annual GDP.
• Currently, UPI stands as the largest among the payment systems operated by the National Payments Corporation of India (NPCI), including the National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar-enabled Payment System (AePS), Bharat Bill Payment System (BBPS), and RuPay, among others.

Achievements of India’s DPI

• PMJDY Growth: The Pradhan Mantri Jan Dhan Yojana (PMJDY) saw a threefold increase in accounts, from 147.2 million in March 2015 to 462 million by June 2022, with women owning 56% of these accounts.
• Jan Dhan Plus Impact: The Jan Dhan Plus program encouraged low-income women to save, leading to over 12 million women customers and a 50% increase in average balances in just five months, potentially attracting $3.1 billion in deposits with 100 million low-income women.
• Lower Cost of Compliance: India Stack digitized and simplified KYC procedures, reducing banks' cost of compliance from $0.12 to $0.06. This attracted lower-income clients and generated profits for new product development.
• Cross-Border Payments: The UPI-PayNow interlinking between India and Singapore, operationalized in February 2023, facilitates faster, cheaper, and more transparent cross-border payments, aligning with G20's financial inclusion priorities.
• Data Sharing Control: India's Account Aggregator (AA) Framework strengthens data infrastructure, enabling data sharing with consent through an electronic consent framework regulated by RBI.
• Cumulative Data Sharing: A total of 1.13 billion accounts are enabled for data sharing, with 13.46 million cumulative consents raised as of June 2023.
• Data Empowerment and Protection Architecture (DEPA): DEPA grants individuals’ control over their data, allowing them to share it across providers, fostering innovation and competition without heavy investment in client relationships by new entrants.
• Government to Person (G2P) Payments: India established one of the world's largest digital G2P architectures using DPI, facilitating $361 billion in direct transfers to beneficiaries through 312 schemes from 53 central government ministries.
• Savings and Impact: As of March 2022, this resulted in total savings of $33 billion, equivalent to nearly 1.14% of GDP.
• Unified Payments Interface (UPI): More than 9.41 billion transactions, valued at about Rs 14.89 trillion, occurred in May 2023 alone.
• Significant Share of GDP: In the fiscal year 2022–23, UPI transactions accounted for nearly 50% of India's nominal GDP.

DPI's Private Sector Benefits

• Efficiency Improvements: DPI in India streamlined and reduced the complexity, cost, and time of business operations, leading to enhanced efficiency for private organizations.
• Cost Reduction Examples: Some NBFCs achieved an 8% higher conversion rate in SME lending, 65% savings in depreciation costs, and a 66% reduction in fraud detection costs.
• Onboarding Cost Decrease: Banks reduced customer onboarding costs from $23 to $0.1 with DPI utilization.

Recently, India presented PM GatiShakti National Master Plan at the '2023 Regional Cooperation and Integration Conference: Strengthening Regional Cooperation and Integration through Economic Corridor Development (ECD),' organized by the Asian Development Bank (ADB) in Tbilisi, Georgia.

The conference was held from September 5th to 7th, 2023, and saw participation from over 30 member countries.

Key Points:

• Conference Objective: The conference aimed to explore ways to integrate a spatial transformation/area-centric approach with ECD and enhance regional cooperation through a broader perspective.
• Additionally, it focused on sharing knowledge related to the application of the Economic Corridor Development (ECD) framework and operational guidelines for investable projects.
• Transformative Initiative: PM GatiShakti – National Master Plan for Multi-modal Connectivity as a transformative "whole-of-government" approach for integrated planning of multimodal infrastructure connectivity to economic nodes and social infrastructure, thereby improving logistics efficiency.
• Socio-Economic Development: PM GatiShakti principles prioritize socio-economic area-based development as part of regional connectivity, leading to both Ease of Doing Business and Ease of Living.
• Technological Foundation: PM GatiShakti is a GIS data-based digital platform with over 1400 data layers and 50+ tools, offering visual depictions of infrastructure, land use, existing structures, soil quality, habitation sprawl, tourism sites, and more for data-driven decision-making.
• Area-Centric Development: Under PM GatiShakti, a spatial/area-based holistic development approach is being adopted to encompass influence areas around critical project locations, industrial clusters, tourist sites, and social sector assets.
• Infrastructure Integration: The initiative assesses connectivity infrastructure requirements for integrating the manufacturing value chain, logistics facilities, schools, hospitals, and skilling centres at the planning stage.
• Regional Connectivity: PM GatiShakti enhances the extension of India's multimodal corridors to strengthen regional connectivity with neighbouring countries.

Recently, the Union Cabinet has granted approval for a Rs. 3,760 crore viability gap fund (VGF) to support battery energy storage systems (BESS), bolstering the renewable energy sector's ability to store green energy during periods of low generation.

Key Points:

• VGF for BESS: Under this initiative, the government will offer financial support of up to 40% of the capital cost for BESS projects, with a total storage capacity of 4,000 megawatt-hours (MWh) until FY31.
• This move aims to reduce the levelized cost of storage (LCoS) to Rs. 5.50-6.60 per kilowatt-hour (kWh), making energy storage an economically viable solution to manage peak power demand.
• Tranches and Investments: The VGF disbursement will occur in five tranches linked to various stages of BESS project implementation.
• The government anticipates that this investment of Rs. 3,760 crore will attract around Rs. 9,500 crore in investments.
• The goal is to achieve 50% of India's energy requirements from renewable or non-fossil sources by 2030.
• Distribution Company Access: To ensure the benefits of this scheme reach consumers and support power distribution, a minimum of 85% of BESS project capacity will be made available to distribution companies (discoms).
• This move enhances renewable energy integration into the electricity grid, minimizes wastage, and optimizes transmission network usage, reducing the need for costly infrastructure upgrades.
• Competitive Selection: BESS developers will be selected for VGF grants through competitive bidding, fostering competition and encouraging the growth of a robust BESS ecosystem.
• Importance of BESS: Grid-scale battery storage systems are crucial for managing renewable energy's fluctuation based on sunlight and wind conditions.
• These storage systems store energy for release during periods of low generation, providing stability to the grid. However, their adoption in India has been limited due to high costs.

On 21^st August, 2023, the Telecom Regulatory Authority of India (TRAI) has unveiled its recommendations concerning "License Fee and Policy Matters of DTH Services."

Key Points

• Background and Purpose: TRAI has issued recommendations following a request from the Ministry of Information and Broadcasting.
• This request was made to address the amendments made by the Department of Telecommunications in the Unified License Agreement.
• Changes in Definitions: The amendments made by the Department of Telecommunications involve changes in the definitions of Adjusted Gross Revenue (AGR) and Bank Guarantee (BG) quantum, aiming for structural reforms.
• License Fee and Bank Guarantee: The operation of Direct-to-Home (DTH) services in India is guided by policy guidelines that prescribe a License Fee (LF).
• Additionally, a Bank Guarantee (BG) is required to ensure timely payment of dues and adherence to license conditions.
• Consultation Process: TRAI released a Consultation paper on "License Fee and Policy Matters of DTH Services" on January 13, 2023.
• It invited comments from stakeholders, receiving seven comments and one counter-comment.
• An Open House Discussion was also held on April 20, 2023, to discuss the issues raised in the consultation paper.
• Salient Recommendations: TRAI's recommendations encompass various aspects of License Fee and Policy Matters for DTH services:
  • ­Gross Revenue (GR) definition and exclusions
  • ­Calculation of Applicable Gross Revenue (ApGR)
  • ­Adjusted Gross Revenue (AGR) calculation, including the exclusion of GST paid
  • ­Revision of Form-D (Statement of Revenue and Licence Fee)
  • ­Mechanism for deduction verification process
  • ­Reduction of License Fee for DTH Licensees to zero over time
  • ­Bank Guarantee requirements, including electronic options
  • ­Implementation of recommendations 'prospectively'
• Boosting the DTH Sector: The implementation of these recommendations is expected to invigorate the DTH sector by addressing crucial aspects of License Fee, Bank Guarantee, and revenue calculations.
• These measures aim to facilitate growth and competitiveness in the television distribution market.

The Bharat New Car Assessment Programme (Bharat NCAP) was unveiled by Union Minister for Road Transport and Highways, on 22^nd August.

Key Points

• Aatmanirbhar Automobile Industry: Union Minister for Road Transport and Highways emphasized that the Bharat NCAP will be instrumental in making India's automobile industry "aatmanirbhar" (self-reliant).
• Timeline: Set to be effective from October 1, 2023, this initiative aims to enhance car safety standards in India, with a focus on vehicles weighing up to 3.5 tonnes.
• Enhancing Road Safety: The primary objective of Bharat NCAP is to boost road safety by assigning star ratings to cars based on their performance in rigorous safety assessments.
• Safety for all: These assessments cover both adult occupant (AOP) and child occupant (COP) safety, providing consumers with a straightforward means of comparing safety levels among different car models.
• Safety Testing Categories: Safety evaluations under Bharat NCAP will encompass front impact, side impact, and side impact pole tests.
• Exclusion of EV: While electric vehicles (EVs) are not initially included, there are plans to incorporate them in the near future.
• Nodal Authority: The Central Institute of Road Transport (CIRT) will handle the publication and certification after the public disclosure of crash test results.
• Global Alignment: The Bharat NCAP test protocol will adhere to international NCAP rating agencies and incorporate front impact, side impact, and pole impact tests at a speed of 64 km/hour.

Significance of Bharat NCAP

• Raising Consumer Awareness: Bharat NCAP ratings hold substantial importance in terms of increasing consumer awareness. These ratings will offer consumers a clear insight into the level of protection provided to vehicle occupants, encompassing aspects like adult occupant protection, child occupant protection, and safety assist technologies.
• Advancing Safer Vehicles: The program's significance also lies in its role as a consumer-oriented platform. It empowers customers to make informed choices by selecting vehicles with higher Star Ratings, thereby promoting the production of safer vehicles by manufacturers.
• Elevating Safety Standards and Export Potential: Bharat NCAP is committed to enhancing both structural and passenger safety within automobiles. Concurrently, it seeks to boost the export potential of Indian-made vehicles, making them more competitive in international markets.
• Contributing to Aatmanirbhar Initiative: This initiative aligns seamlessly with the broader objective of fostering self-reliance in the Indian automobile industry. By focusing on safety and quality, Bharat NCAP aids in strengthening the domestic automotive sector's capabilities.

Steps Taken to Address Road Safety Issues in India

National Road Safety Policy (NRSP):

• Formulated in 2010 based on recommendations of the S. Sundar Committee.
• Aims to raise awareness about safety issues and support State Governments and local administrations in road safety efforts.
• Includes reviews of road design standards and vehicle maintenance regulations.
• Establishment of the National Road Safety Council to oversee road safety matters.

District Road Safety Committees (DRSC):

• Created in each district under the Motor Vehicle Act of 1988.
• Responsibilities include ongoing analysis of traffic collisions, gathering information on incidents, causes, accident sites, and victims.
• Tasked with developing district road safety plans and emergency medical plans.
• Ensures ambulance accessibility and connectivity to hospitals.

Motor Vehicles (Amendment) Act, 2019:

• Introduced several road safety measures, including:
• Establishment of a National Road Safety Board.
• Increased fines for traffic violations.
• Recall of defective vehicles harmful to the environment and people.
• Creation of a Solatium Fund for hit-and-run accident victims.
• Punishment for vehicle owners for violations committed by juveniles.
• Introduction of automated testing for driver's licenses and fitness certificates.

Protection of Good Samaritans:

• Guidelines issued to protect those who provide emergency care to accident victims.
• Good Samaritans are safeguarded from civil and criminal liability.
• Police are discouraged from involving Good Samaritans in investigations.
• Hospitals should not refuse to treat accident victims and should not charge for first aid.

Vehicle Safety Standards:

• Mandatory front and side crash tests for new car models implemented in 2017.
• Requirement for new cars to have airbags as standard.
• Guidelines for road safety audits on National Highways.
• Installation of roadside safety crash barriers and speed warning boards.
• Mobile app 'Sukhad Yatra 1033' for reporting hazards and accidents on National Highways.
• Efforts to rectify identified black spots.
• Road safety audits conducted at all highway development stages.
• Provision of foot over bridges and underpasses for pedestrian safety.

Multi-Pronged Strategy:

• Based on 4 'E's: Education, Engineering (of roads and vehicles), Enforcement, and Emergency Care.
• Aimed at addressing road safety comprehensively and reducing road accidents and fatalities.