Expand transport infra capacity to boost economic growth

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India must go beyond a business-as-usual approach to boost investments in the transport sector, especially railways, to spur economic growth, a government panel has said.

"...The overall economic growth could be stymied if appropriately strategic choices not made now to facilitate significant capacity expansion of the railways as has been done in China over the past decade of so. Such an expansion will not take place in a business as usual approach," the High Level Committee on National Transport Development Policy Committee (NTDPC) has said in its report.

The NTDPC set up under the chairmanship of Rakesh Mohan will submit its report to the Prime Minister tomorrow. Planning Commission Deputy Chairman Montek Singh Ahluwalia will also be present on the occasion.

The Committee was set up in 2010 to assess the transport requirement of the economy for the next two decades in the context of economic, demographic and technological trends at local, national and global levels.

The committee's early projections indicate that transport investment should gain importance during 12th Plan and 13th Plan periods, increasing to 3.1 per cent of the Gross Domestic Product during 2013-17, and 3.6 per cent of GDP during 2018-17.

The investment in transport sector increased from 2 per cent of GDP during 1995-99 to an average of 2.6 per cent of GDP between 2007 and 2011.

According to panel, the increase in investment in transport sector would push overall investment in infrastructure to 6.8 per cent of GDP during 12th Plan (2012-13) and 8 per cent of GDP in 13th Plan (2017-22). This was 5.6 per cent of GDP during 2007-11.

The panel has also projected that with the assumption of 7 per cent annual average economic growth rate, the traffic in transport sector would increase by eight fold in next 20 years.

According to the Committee, India needs to focus on transport infrastructure including rail, road, port and air. Besides, it should pay attention to the development of human resource in view of huge projected rise in investment in transport sector.

The panel has also highlighted the need for improvement in cross boarder transportation and in north eastern region of the country. Besides, it also called for improvement in transport infrastructure for commodities like coal, iron ore and other materials which boosts manufacturing activities.

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