QUICK REVISION MODULE

(UPSC PRELIMS 2022) ECONOMICS QRM

INFRASTRUCTURE PART-2

ROAD SECTOR

India has the second largest road network in the world of about 58.98 lakh km.

Share of transport sector in the GVA for 2017-18 was about 4.77 %

www.visionias.in Vision IAS 1

 SHARE OF
TRANSPORT
SECTOR 4.77 %

Road Air Water

Transport Railways Transport Transport

3.06 % 0.75 % 0.15 % 0.06 %

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Government Initiatives
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Bharatmala Pariyojana
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Aims at construction/ up-gradation of National Highways of 34,800 km length

over a period of 5 years (2017-18 to 2021-22)

The project is to be funded through debt funds, private investment or from central
road fund or toll collection

Infrastructure Investment Fund (InvIT)

InvIT to monetize its completed stretches of public funded national highways with
the objective of mobilizing additional resources through capital markets

It is similar to mutual funds that allow investment from individuals and institutional
investors in infrastructure projects to earn a portion of the income as return

www.visionias.in Vision IAS 2

 Special Accelerated Road Development Programme for the
North-Eastern region (SARDP-NE)
It envisages improvement of road connectivity to the State capitals with district
headquarters in the north-eastern region. It aims to improve about 4,099 km in
the North-East in Phase A

North-East Road Network Connectivity Project Phase I - improve infrastructure in

Meghalaya and Mizoram and enhance connectivity with inter-state roads and
international borders

To widen and revamp 1.25-lakh km of roads, Government of India has approved

the launch of Phase-III of its rural road programme Pradhan Mantri Gram Sadak
Yojana (PMGSY)

PMGSY-III is envisaged to upgrade 1,25,000 kms of road length over the next ve
years at an estimated cost of Rs 80,250 crore (US$ 11.48 billion)

Budget proposals 2021 - 2022

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3,500 km of 1300 km of 1,100 km of 675 km of highway

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National highway National Highways National Highways works in West

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works in Tamil will be undertaken works in Kerala, Bengal, including up

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Nadu that Madurai in Assam over the including a 600 km gradation of the
- Kollam corridor, next three years at section of Mumbai Kolkata-Siliguri
Chittoor - Thatchur a cost of more -Kanyakumari road, at a cost of
corridor to be than INR 34,000 Cr corridor in Kerala, INR 25,000 Cr
constructed at an at an investment of
investment of INR INR 65,000 Cr
1.03 lakh crore

www.visionias.in Vision IAS 3

 Recommendations of
Rakesh Mohan Committee

Roads should not be looked at in isolation, but as part of an integrated

multi-modal system of transport.

The program of PMGSY should be expanded to achieve universal connectivity

to all habitations on time bound basis

Private sector nancing in the highways will remain conned to commercially

viable and high trafc density stretches

RAILWAYS

The national railway network is divided into 17 zones, which are further subdivided
into divisions. There are a total of 68 divisions. There are thirteen undertakings under
the control of the Ministry of Railways
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Key Developments
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Bibek Debroy Committee

Private entry into running both freight and passenger trains should be allowed.
Ministry of Railways has invited private participation for operation of passenger
train services

It would be the rst initiative of private investment for running passenger trains over
Indian Railways network attracting investments of an estimated 30,000 crore which is
expected to begin in 2023

www.visionias.in Vision IAS 4

 Pros and Cons of privatization in railways

Benets
Improved efciency: A private rm is interested in making a prot.

Private players face pressure from shareholders to perform efciently.

It would ensure improved quality of service with competitive fares.

The privatization will also help in accommodating the latest technology

in railway coaches, online services etc.

Challenges

Privatization in railways might create a private monopoly.

Private enterprise runs on prot, it might hike fares.

Private companies are unpredictable in their dealings and do not share

their governance secrets with the world at large.

High costs and lower returns, policy uncertainty, lack of a regulator to

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create a level playing eld, lack of incentives for investors and

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procedural/operational issues such as delays in land acquisition etc.

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Dedicated Freight Corridors (DFCs)

The Indian Railways' quadrilateral linking the four metropolitan cities of Delhi,
Mumbai, Chennai and Howrah, commonly known as the Golden Quadrilateral;
and its two diagonals (Delhi-Chennai and Mumbai Howrah), adding up to a total
route length of 10,122 km carries more than 55% of revenue earning freight
trafc of IR.

www.visionias.in Vision IAS 5

 Few Sanctioned Dedicated Freight Corridors are

Western Dedicated
Freight Corridor
Dadri, U.P to Jawaharlal
Dankuni West Bengal
Nehru Port, Mumbai
— 1,468 km
Eastern Dedicated
Freight Corridor
Ludhiana Punjab to
— 1,760 km
(KharagpurVijaywada);
Other announced
corridors
East-West Corridor
(KolkataMumbai);
North-South Corridor
(Delhi-Chennai);
East Coast Corridor
Southern Corridor
(Chennai-Goa)

Government initiatives

1. The Indian Railways announced the 'Clone Train Scheme', wherein it planned to
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run a clone train with the train of the same number, to help and provide relief to
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the waitlisted passengers over heavy passenger trafc routes

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2. Indian Railways sanctioned a feasibility study for seven bullet train projects - all
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open to PPP investments

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3. The Ministry of Railways decided to create a special cell, Project Development

Cell (PDC), in the railway board to increase investments and inow of foreign
direct investment (FDI)

www.visionias.in Vision IAS 6

 Recommendation by Various
Committees for Reforms

Bibek Debroy Committee

The nancial statements of Indian Railways need to be re-drawn, consistent
with principles and norms nationally and internationally accepted.

Setting up an overarching Railway Regulatory Authority of India (RRAI) as an

independent regulatory body.

Constructing new suburban lines should be undertaken as joint ventures with

state governments. There are too many Zones and Divisions and thus a
rationalization exercise is required.

Rakesh Mohan Committee

Separation of railways management and operations from the Government.

Accounting system to be revamped into a company account format in line with

the Indian GAAP (Generally Accepted Accounting Principles).

Indian Railways should take steps to capture a signicant share of the fast
growing FMCG, Consumer Durable and Information Technology, containerized
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cargo and other segments like automobiles, etc.

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Establishment of National Board for Rail Safety & Establishment of Railway

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Research and Development Council.

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Budget 2021-22 proposals for Railways

National Rail Plan 2030 has been prepared for infrastructure
development for DFCs

East Coast Corridor East-West Corridor North-South Corridor

from Kharagpur to from Bhusaval to K from Itarsi to
Vijaywada haragpur to Dankuni Vijaywada

www.visionias.in Vision IAS 7

 CIVIL AVIATION

India is the third largest domestic market for civil aviation in the world

The civil aviation sector contributed USD 8.9 billion to India's GDP in 2014 and
supported 1.31 million direct, indirect and induced aviation jobs

The airline operators in India have scaled up their aircraft seat capacity from an
estimated 0.07 annual seats per capita in 2013 to 0.12

Here has been an increase in air cargo, both domestically and internationally,

Director General of Civil Aviation (DGCA) is the regulatory body in the eld of civil
aviation under the Ministry of Civil Aviation

Government Initiatives

RCS – UDAN (Regional Connectivity Scheme – Ude Desh ka Aam Nagrik)

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UDAN will be applicable on ights which cover between 200 km and 800 km with
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no lower limit set for hilly, remote, island and security sensitive regions.
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The scheme seeks to reserve a minimum number of UDAN seats i.e. seats at
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subsidized rates and also cap the fare for short distance ights.
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The scheme UDAN envisages providing connectivity to un-served and under-served

airports of the country through revival of existing air-strips and airports.

National Civil Aviation Policy

India to become 3rd largest civil aviation market by 2022 from 9th.

Domestic ticketing to grow from 8 Cr in 2015 to 30 Cr by 2022.

Cargo volumes to increase by 4 times to 10 million tonnes by 2027.

Ensuring availability of quality certied 3.3 lakh skilled personnel by 2025.

www.visionias.in Vision IAS 8

 PORTS AND SHIPPING

Shipping is essential to both commodity and services trade of any country.

India has a coastline spanning about 7,500 km.

Around 95 per cent of India's trade by volume and 68 per cent in terms of
value is transported by sea

Inland waterways

Inland Water Transport (IWT) carries less than 2 per cent of India's organized
freight trafc and negligible passenger trafc.

The Inland Waterways Authority of India (IWAI) is mandated to develop and

maintain infrastructure for fairway, navigational aids and terminals
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www.visionias.in Vision IAS 9

 Government Initiatives

Sagar Mala Project

Focuses on modernizing and developing ports, enhancing port connectivity,
supporting coastal communities and stimulating port-linked industrialization.

Jal Marg Vikas Project is expected to benet densely populated states of

Uttar Pradesh, Bihar, Jharkhand and West Bengal through the development
of national waterways-1.

14 mega Coastal Economic Zone (CEZs) is proposed to be established.

Each CEZ will be an agglomeration of coastal districts within a State.

Aims to double the share of water transportation in the modal mix.

Aims to reduce the logistics costs for foreign and domestic trade, leading to
an overall cost savings of INR 35,000 to INR 40,000 Cr annually by 2025.
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Model Concession Agreement

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for Port Development

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Union Cabinet approved changes in the model concession agreement (MCA) for
public-private partnership projects (PPP) in major ports conceived under
Sagarmala programme.

It provides an exit route to developers where they can divest their equity up to 100
per cent after completion of two years from the Commercial Operation Date (COD)

The royalty to the developer will be charged on basis of per million tonne of
cargo handled

A complaint portal for port users and a monitoring arrangement has also been
introduced for keeping periodical status report of the project

www.visionias.in Vision IAS 10

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 The Major Port Authorities Bill 2020

It vests the administration, control and management of such ports upon the Major
Port Authorities Board. These Boards will replace the existing Port Trusts.

The Boards of Port Authority have been delegated full powers to enter into contracts,
planning and development, xing of tariff except in national interest, security and
emergency arising out of inaction and default.

The Bill denes PPP projects as projects taken up through a concession contract
by the Board. For such projects, the Board may x the tariff for the initial
bidding purposes.

It will reorient the governance model in central ports to landlord model, whereby
port infrastructure is leased to private operators but ownership of the port remains
with port authority.

Vadhavan Port: The Union Cabinet has given its 'in-principle' approval for setting up
a Major Port at Vadhavan, located about190 km north of JNPT in Maharashtra.
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www.visionias.in Vision IAS 10

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For inland waterways

The ministry is augmenting the capacity of NW-l under the Jal Marg Vikas project

To provide institutional funding, the Government has proposed to allocate

2.5 per cent of the proceeds of Central Road Fund (CRF) for development and
maintenance of National Waterways

Other Initiatives

Project Unnati: An exercise was undertaken to prepare a Quantitative

Benchmarking Module which covered the operational, nancial, human resources
and efciency related parameters for benchmarking of efciency and productivity
of Major Ports in India

India, one of the world's ve major ship recycling countries, has acceded to the
IMO Hong Kong International Convention.
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India has become the rst country in the world to issue a Biometric Seafarer
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Identity Document (BSID), capturing the facial biometric data of seafarers

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