A deep dive into India’s four pillars of economy
ECONOMY & POLICY

A deep dive into India’s four pillars of economy

While infrastructure and investment provide the necessary support systems, innovation and inclusivity drive the development of new technologies and industries. Hence, incentivising these four factors is crucial for national economic growth, writes Sneha Gurjar, Director, CEM Engineers....
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While infrastructure and investment provide the necessary support systems, innovation and inclusivity drive the development of new technologies and industries. Hence, incentivising these four factors is crucial for national economic growth, writes Sneha Gurjar, Director, CEM Engineers. According to a recent statement by Finance Minister Nirmala Sitharaman, the government is currently focusing on four pillars of the Indian economy – infrastructure, investment, innovation and inclusiveness — to make India a developed nation by 2047. While innovation and inclusivity drive the development of new technologies and industries, infrastructure and investment provide the necessary support systems. Hence, incentivising these four factors is crucial for national economic growth. The infrastructure sector is one of the key drivers of the Indian economy, becoming one of the most pressing concerns not just in the infrastructure industry but for overall national development and growth today. Infrastructure provides the most basic facilities that help serve different economic activities, including education, communication, transport, banking and insurance, health, and technology. In 2015, the infrastructure and real estate sector got a major push with the Smart Cities Mission launched by the government. Since the mission worked on factors like better infrastructure, better waste and water management, integrated traffic management and safer cities using technology, the Tier II cities in India got upgraded. The PM GatiShakti Scheme, or the National Master Plan for Multi-Modal Connectivity, is also being touted as a plan that significantly pushes the infra sector. Various investment options As infrastructure has a multiplier effect on economic growth across sectors, the government is incentivising various sources of infrastructure investments. Funding large-scale and long gestation infrastructure projects is difficult for the government alone to allocate sufficient resources, and banks and other institutions are constrained by asset-liability risks when they lend short-term funds to finance long-term projects. In recent years, the public-private partnership is gaining a lot of momentum. The PPP has also found ways to reduce irrelevant expenditures and make infrastructure development more efficient as they can help share various risks, cost recovery, accountability and help in infrastructure management. To take full advantage of various investment schemes, the future of Indian urban development must be critically examined by focusing on big infrastructure projects directly affecting the national economy and trade. For example, the goods (trading and manufacturing) and the services sector, storage, manufacturing and transport infrastructure play a crucial role in the functioning of the economy by facilitating the storage and distribution of goods. They act as a link between the production of goods and their final delivery to the customer. They also improve the efficiency of supply chains and the competitiveness of businesses. Amid expanding cities, congested roads, and dense urban cores, efficient arterial infrastructure chains capable of offering ease of delivery and convenience are key to the overall efficiency of connectivity. Keeping up with the fast-evolving purchasing patterns, developing trade infrastructure is vital to keep the modern retail industry moving, considering its impact on the stakeholder company’s sales and, by extension, the national economy. The government aims to significantly boost the manufacturing sector to contribute an all-time high of about 25 per cent of GDP by 2025, from below 16 per cent currently. India’s power infrastructure, traditionally a weakness, is turning a corner, but transportation infrastructure still faces overwhelming capacity constraints. Large transport infrastructure projects, such as railway stations, airports, ports, etc., directly affect the national economy and markets. Ports, for example, are an extremely volatile and fast-growing sector. Today, ports handle 95 per cent of India’s external trade by volume and 70 per cent by value, pointing at a growing national economy from the sector. The biggest challenges the country’s ports face are congestion, high ship turnaround times and limited hinterland linkages, which efficiently planned and well-designed ports and arterial infrastructure can resolve. Recognising these gaps, the government of India is working on a Maritime India Vision 2030 by investing Rs 1.2 trillion in port infrastructure. Innovative technologies for sustainability Amidst the growing infrastructure in India, another major concern reinforced by the G20 Summit in India this year is sustainability and environmental impact. Infrastructure development and sustainability are two sides of the same coin, and with special attention towards generating clean energy and sustainable urban growth, the infrastructure sector is highly encouraged to look for greener development options. As infrastructure projects grow in scale and numbers, the technicalities associated with sustainability and green design assume multiple layers. Building construction and operations can have extensive direct and indirect impacts on the environment, society and the economy. The use of innovative technology can help introduce greener interventions within large infrastructure projects. For example, extensive research and development of infrastructural interventions such as PV systems to integrate solar power, PEB engineering, ventilation technologies, smart facades, innovative waste management systems, low energy consumption systems, etc., have started impacting the Indian green infrastructure industry. The Indian economy has been undergoing significant changes in recent years, with a strong focus on innovation and technology. India made it to the top 40 countries in the Global Innovation Index (GII) for the first time in 2022. The government has highly incentivised R&D initiatives to promote innovation in all sectors, contributing to the growth of the national economy, including infrastructure. Inclusion: Bridging the socio-economic divide The development of the Indian economy also encourages holistic inclusivity that can overcome the nation’s socio-economic divide. Inclusivity in the workforce, be it gender inclusiveness through socio-familial development or digital inclusiveness through technological innovation, given the importance of information and communication technologies in today’s world, can bridge the gap between the digital divide seen in India today. The government is shifting its focus on infrastructure development that enhances positive outcomes in social inclusivity and ensures that every individual, community or social group is included and supported by improved infrastructure. For holistic growth in a fast-developing country like India, using innovative technology, reducing negative environmental impact, creating socio-economic equality and adaptive infrastructure development for streamlining multiple sectors is the need of the hour. Infrastructure development in India is as much a prerequisite for maintaining current growth as it is for driving higher future growth. With an increased focus on the infrastructure sector to increase India’s economic value, private sectors, users, industry professionals, and the government must work together to achieve these goals and help boost the national economy. About the author: Sneha Gurjar is the Director at CEM Engineers. With over 15 years of extensive experience of designing and leading institutional, industrial, residential and infrastructural projects across the country, she is an architect of excellent professional aptitude. She has been instrumental in steering the growth trajectory of the firm over the past decade.

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