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Sagarmala to Modernize Ports & Augment Port-Led Development

Sagarmala, also called Blue economy, launched in 2015 is a strategic and customer-oriented initiative of the Government of India to modernize India’s Ports so that port-led development can be augmented and coastlines can be developed to contribute in India’s growth. Prime Minister Narendra Modi, had stated, “To me the Blue chakra or wheel in India’s national flag represents the potential of Blue Revolution or the Ocean Economy. That is how central the ocean economy is to us”.

Sagarmala project, the centrepiece of India’s push for the blue economy, has been envisioned to provide ports and the shipping the rightful place in the Indian economy and to enable port-led development, to harness India’s 7500 km long coastline, 14500 km of potentially navigable waterways and strategic location on key international maritime trade routes. Sagarmala project includes constructing ports, augmenting coastal infrastructure, developing inland waterways, intensifying fishing, and creating special economic zones and tourism promotion. The project proposes to execute nearly 400 different projects along the coastline at a whopping cost of ₹7.985 lakh crore in the next two decades.

Components of Sagarmala Project are:

  • Port Modernization by de-bottlenecking and capacity expansion of existing ports and Development of New Greenfield Ports
  • Enhancing Connectivity of the ports to the hinterland, optimizing cost and time of cargo movement through multi-modal logistics solutions including domestic waterways (inland water transport and coastal shipping)
  • Developing Port-linked Industrial clusters and Coastal Economic Zones to reduce logistics cost and time of EXIM and domestic cargo
  • Promoting sustainable development of Coastal Communities through skill development & livelihood generation activities, fisheries development, coastal tourism etc.

Port-Led Development in India is needed as it is one of the fastest growing large economies in the world and ports play an important role in the overall economic development of the country. Approximately 95 % of India’s merchandise trade by volume passes through sea ports. Many ports in India are evolving into specialised centres of economic activities and services and are vital to sustain future economic growth of the country.

Indian ports handle more than 90%t of total EXIM trade volume. There is a great scope to increase the share of merchandising trade in India’s GDP as the current proportion of merchandize trade in India’s GDP is merely 42%, whereas for some developed countries and regions in the world such as Germany and European Union, it is 75% and 70% respectively. With “Make in India” initiative, the share of merchandise trade in India’s GDP is expected to increase and approach levels achieved in developed countries. India lags far behind in ports and logistics infrastructure. Against a share of 9% of railways and 6% of roads in the GDP the share of ports is only 1%. In addition high logistics costs make Indian exports uncompetitive.

According to Niti Aayog, “Development of Blue Economy can serve as a growth catalyst in realizing the vision to become a $10 trillion economy by 2032.” Blue Economy is a framework that places the coasts and the oceans at the centre of economic growth, for a development that is substantial, sustainable and inclusive. Focus on Blue Economy appears to be the right step forward as Ocean covers 70% of our Planet’s surface, where water connects people, places and systems.

Sagarmala initiative strives to ensure sustainable development of the population living in the Coastal Economic Zone. This would be done by synergising and coordinating with State Governments and line Ministries of Central Government through their existing schemes and programmes such as those related to community and rural development, tribal development and employment generation, fisheries, skill development, tourism promotion etc. In order to provide funding for such projects and activities that may be covered by departmental schemes a separate fund by the name ‘Community Development Fund’ is to be created.

The financial viability, environmental implications and social costs of pushing this Sagarmala project is also a matter of concern as the coastline is ecologically, socially and economically important. It is densely populated as an estimated 40 lakh people from traditional fishing communities live along the coastline and are dependent on near-shore fisheries for their livelihood and survival. The coastline is also an extremely dynamic entity that is made of multiple ecosystems, many of which are rare and threatened. It is vulnerable to storms, tidal surges, floods and the occasional tsunami. Any major intervention should as such be made only after serious consideration of the multi-faceted implications and a cost-benefit analysis that goes far beyond just numbers and economic evaluation.

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