Economic Survey Volume II highlights importance of Industry and Infrastructure for India to maintain stable and sustainable economic growth. India’s ranking in World Bank’s Logistics Performance jumped to 36^th position in 2016 from 58^th rank in 2014. UPSC last year asked regarding Roadways so this year expected question from Ports and economic growth.

Introduction

1. World Bank rightly pointed out ‘infrastructure development’ includes–Ports, Roadways, Railways, Telecommunication, critical to delivering growth, reducing poverty, building human capability and to address broader developmental goals.
2. Economic Survey Vol II highlights among the same per capita emerging countries India’s performance is significantly better.
3. India has a coastline spanning 7516.6 kilometres, forming one of the biggest peninsulas in the world. According to the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is done through maritime transport.
4. There are 12 Major Ports & 187 Minor/Intermediate ports.
5. Government is taking various measures to enhance capacity of existing ports and creating new major ports, Ease of doing business- Sagarmala, Bharatmala, Inland water transport(Jal Vikas Marg), East Coast Economic corridor etc.

Sagarmala

1. Sagarmala project is a port-led development programme of Ministry of Shipping.
2. A Shipping ministry study has claimed that the project could lead to an annual saving of Rs 40,000 crore by optimizing logistics.

Need for such a project:

1. India is lacking the high quantity of international trade via coastal line due to the lack of infrastructure facilities and advanced coastal technologies.
2. The cost of shipping/evacuating goods through Indian maritime transport is quite high compared to that of China, South Korea, Japan and other developed countries. This makes Indian goods uncompetitive in the international market.
3. China, South Korea and Japan have effectively used their coastline for ‘port-led development’. India has to replicate their model to stay competitive.
4. So, a plan has to be devised to reduce logistics cost and strengthen India’s EXIM industry. Sagarmala Project is one such plan.

Objectives of Sagarmala:

PORT MODERNIZATION-

1. Augmenting operational efficiency of ports (more terminals for loading and unloading cargo).
2. 40+ capacity enhancement projects at major ports
3. 6–8 new ports.

PORT CONNECTIVITY-

1. Optimizing logistics (rails, roads and inland waterways).
2. Port and industrial connectivity.

PORT LED INDUSTRIALISATION-

1. 14 Coastal Economic Zones, Industrial Clusters Identify capacity additions Modernize India’s Ports to achieve Ease of Doing business.

COASTAL COMMUNITY DEVELOPMENT

1. Skill development.
2. Uplifting fishermen and other local communities.
3. Island development.

Vision of Sagarmala:

 

Analysis

Impact of sagarmala by 2025

Other advantages of SAGARMALA:

1. It is a counter to China’s String of Pearls.
2. It is a security infrastructure envisaged by India in the Indian Ocean region.
3. It is a defense capability enhancement project of Indian Navy.

Current challenges to Shipping Industry of India: Economic survey volume 2

1. Globally, maritime freight rates in most shipping segments endured volatility and overall downward movements.
2. There has been a sharp decline in the share of Indian ships in the carriage of India’s overseas trade from about 40 per cent in the late 1980s to 7 per cent in 2015-16.
3. Existing fleets are ageing.

Recommendations to further enhancement of this project:

1. Setting up storage capacities at origin-destination ports to shorten turnaround time.
2. Developing adequate ship-repair facilities in the maritime states.
3. Indian ports will have to upgrade their technology levels to be comparable to international standards.
4. Creating dedicated coastal berth ports for coastal shipping.
5. Establishing new transhipment port (transfer cargo from one ship to another).
6. During the last few years the non-major ports are gaining more share of cargo handling compared to major ports so the focus should be connecting non major ports to hinterland.(Economic survey volume2 )
7. Fuel tax free for indian tax vessels.
8. Government already proposed Jal Marg Vikas Project’ (on NW-I:River Ganga), a large integrated IWT project to end to end connectivity.

Conclusion

Indian ports now need to plan with a 15-20 year perspective. We are far behind other Asian countries, be it China or a tiny state like Singapore. Emerging innovative port models like Landlord Port development, Coastal Economic Zones are steps in right direction. So it is imperative to have well developed ports to boost our exports, play a vital role in maritime security and to realise broader developmental goals.

Questions:

Q.) Enumerate challenges and prospectus of Sagarmala project in India.

Q.) What do you mean by Port led development? What are the key objectives and vision of  Sagarmala Project? Its impact on trade,employement?