Yesterday, in a webinar with Indian Diaspora in Australia, Mr. Nitin Gadkari, Transport & Shipping and Micro Small and Medium Enterprises (MSME) Minister of India has stated that even with a visible amount of economic distress, Indian economy is set to bounce back and consolidate its position as an alternate economic destination to China. Gadkari's webinar reaffirmed growth in infrastructure and a vibrant MSME sector will be the cornerstone of economic revival in the country.
In a webinar with the Indian Diaspora in Australia, Nitin Gadkari, the Road, of India has reaffirmed that the Indian economy will soon recover from the current COVID crisis. He said that due to the wide-scale demand destruction caused by the recent crisis, there is a visible amount of distress in the economy. However, despite mounting downward pressure in the market, the COVID crisis can be a blessing in disguise & can help India to consolidate its position as a crucial growth engine of the global economy.
Mr. Gadkari's webinar reiterated the commitment of the Government of India (GOI) to support the Indian MSME sector through seamless credit support. The GOI has announced a credit package of USD 46 billion to the MSME. Out of this, more than USD 15 billion has been allocated and around 40% has already been disbursed. A robust MSME will be a cornerstone to help the Indian economy bounce back faster.
Mr. Gadkari's webinar also urged the Diaspora to invest in the emerging MSME sector. To further facilitate investments, India is also developing a credit rating agency, based on simple but effective parameters such as IT returns, GST details, bank turnover, and exports. This will give investors actionable insights to make informed and meaningful investments.
As a long term objective of projecting India as a manufacturing destination in the global stage, India will continue to facelift the existing infrastructure. In the past few years, the country has significantly racked up infrastructure investments. Interestingly, despite COVID been the destabilizing factor in an otherwise buoyant Indian economy, infrastructure development has not lost its steam.
Mr. Gadkari further stated that currently, the country is building highways at the rate of 30 KMs every day. This is a marked improvement from a few years back; when it was around 2 KMs. Work is progressing in 22 green expressways. This includes the Mumbai & Delhi green expressway worth USD 15 billion, which will greatly reduce the time of commute between the two major industrial & business corridor of India.
Indian infrastructure also offers a safe & secured investment option and hence drawing the attention of larger institutional investors including pension funds, insurance funds, & international capital markets.
Alongside extensive road corridors, India is also boosting railway corridors, transforming port infrastructure, linking river lines, and further developing the aviation industry.
Gadkari's webinar mentioned that new industrial corridors and business parks on agribusiness, food, leather, textiles are built around the highways to leverage powerful logistic support. Industrial land is relatively cheap in India & in urban catchments, it can be procured at around USD 400,000 per acre. In rural and forest areas, it is even much cheaper and can be acquired at a fraction of price (USD 12,000- 25,000 per acre)
By systematically building capacity across labor-intensive sectors, these industrial parks & corridors can transform Agri & tribal economy, boost export, generate mass level employment, & reduce dependence on imports. As the country is sitting on a surplus of wheat, sugar, & rice reserves, it is also planning to develop ethanol from them. This can reduce India's reliance on petroleum & pave and help in fiscal consolidation.
Mr. Gadkari's webinar has said that India has all the prerequisite ingredients to develop a state of the art manufacturing base. It has an evolved infrastructure, good quality human capital, robust digital support, technology know-how, and surplus power supplies.
India's potential to become a world-class manufacturing destination can be exemplified by how the country developed PPE manufacturing kit facilities. When the crisis broke out, India had to import PPE kits. Shortly the domestic players sprang into action and as of today, the country is producing 500,000 PPE kits every day. It is not just managing its domestic demand but is also exporting PPE kits to other parts of the world.
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