Development Watch – Week #2 June ’24
Development News
Rural India a priority with Kisan Nidhi scheme
The newly appointed rural development Minister stated that India lives in its villages and rural development remains a priority for the government. Schemes like “Lakhpati Didi” empower women to earn Rs. 1 lakh annually. These programs are being implemented through self-help groups. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has also been a huge employment generator, with increasing shift towards creating assets. The Prime Minister after taking oath has also approved the 17th instalment of the PM Kisan Nidhi Scheme. This will benefit 93 million farmers with around Rs. 20,000 Crores. This initiative is seen as a boost to rural demand and consumer stocks. The new coalition government is expected to focus more on rural welfare, signifying a shift towards consumption-focused policies.
India a big aviation market; Gen-Z expand travel spending
India is a big aviation market. The CEO of Lufthansa highlights the importance of a strong partnership between Air India and Lufthansa within the Star Alliance to offer a unique value proposition for passengers in Indian Aviation market. Star alliance has 26 member airlines who come together at more than 50 global hubs to offer smooth connections across a global network. A management company based in Frankfurt and Singapore coordinates Star Alliance projects and activities. It includes airport co-location, digital infrastructure, frequent flyer integration and joint business lounge projects to improve the travel experience.
As per a new report by McKinsey, titled “The State of Tourism and Hospitality 2024”, India’s travel spending is also expected to grow 9% annually, driven by strong GDP growth. Domestic air passenger traffic is set to double by 2030. This will boost the domestic travel market to potentially become the world’s 4th largest. India’s domestic travel market could also overtake Japan and Mexico. State-subsidized initiatives aim to connect underserved domestic airports and have shifted the focus away from major metropolises like Mumbai and Delhi, towards fast-developing cities viz. Chandigarh and Hyderabad.
Corporate travels drop amid extreme weather
The ongoing heat wave and other extreme weather conditions such as torrential rains in different parts of the country have impacted corporate travel and bookings for hotels and alternative accommodation providers. The aviation industry expects corporate travel to pick up after arrival of monsoon rains, opening of schools, and work-life getting back to normal after elections. In luxury villas and holiday home rentals, corporate bookings are down to zero across locations. Many hotels have also reduced their rates in an effort to maintain occupancy levels. Businesses were also cautious about sending employees to areas affected by the heat. India is currently the world’s 9th largest travel market for business travel spending.
Road Ministry to implement satellite-based toll collection
The National Highways Authority of India (NHAI), under Ministry of Road Transport and Highways, has invited bids through Indian Highways Management Company (IHMC) to develop and implement GNSS-based electronic toll collection system. It would firstly be implemented on commercial vehicles, and then extended to private vehicles over the course of next 2 years. This would increase the efficiency of the tolling operation in line with global practices, while ensuring that the user pays only for the distance travelled. Global Navigation Satellite System (GNSS) is a barrier-free method of electronic toll collection wherein road users are charged on the distance they have travelled on the tolled highway stretch. The system uses constellation of satellites to track vehicles movement and calculate tolls accordingly.
India ranked top-5 in APAC for developmental assets
India is emerging as a top global capital destination in Asia Pacific for land and development sites, with significant foreign investments. Collier’s Asia Pacific Global Capital Flows report highlights 73% of foreign investments directed towards ready assets in Q1-2024. In the March Quarter, foreign investors are backing 55% of the inflows. Foreign investors have pumped in $3.6 billion into India’s realty market in 2023, garnering a 67% share. Four of the top markets globally in Q1 in 2024 are in APAC region, led by China, Singapore and Australia.
Cabinet approves construction of 3 Crores rural, urban houses
The cabinet government has decided to assist 3 crore households for house construction in the 1st cabinet meeting of the new government. The decision was made under the PMAY Scheme, with plans to construct 2 Crore more houses in the next 5 years. Under the PMAY, a total of 4.21 crore houses have been completed for eligible poor families under the housing schemes in last 10 years. All the houses constructed under PMAY are provided along with other basic amenities like household toilets, LPG Connections through convergence with other schemes of Central and State governments.
Azerbaijan proposes COP truce on climate change
Azerbaijan is the host for 2024’s UN Climate Change Conference of Parties (COP-29). The country is aiming to shield the annual talks from geopolitical tensions by proposing a 2-week COP truce or moratorium. This initiative, inspired by the Olympic truce, is intended to unite countries in a collaborative effort to address the pressing issue of climate change. Hikmet Hajiyev, foreign policy advisor to Azerbaijan President Ilham Aliyev, highlighted the current global geopolitical polarization as reminiscent of the Cold War era. This makes consensus building on climate action challenging. The idea of a COP truce is an important element of the COP-29 presidency’s action agenda. The Azerbaijan team is already working on building a coalition around the idea, and talking to different countries in the UN.
Solar investment higher than in other power forms
Global investment in clean energy technology and infrastructure would reach $2 trillion in 2024. This is twice the amount going into fossil fuels, as per the “World Energy Investment” report by International Energy Agency. For the first time in history, total energy investment is expected to exceed $3 trillion. Combined investment in renewable power and grids overtook the amount spent on fossil fuels for the first time in 2023. In fact investment in nuclear+renewables is now set to reach 10 times the amount going to fossil fuels. China has the biggest share of investments. Improvement in supply chains and lower costs are driving investment in forms of clean energy. This includes solar panels, wind turbines, electric cars, heat pumps and nuclear power generation. In India too, a lot of development has happened in the sector. India ranks 4th globally in terms of installed capacity in renewable energy.
Local Feedback
LocalFeedback.org aims to track and document actionable parameters that help improve urban and rural infrastructure. The founder, Susmita, has juggled diverse roles in real estate, project budgeting, valuation and execution on construction sites. Having traveled to more than 20 countries, she has worked across 4 regions in India. Her areas of interest include sustainable buildings, electric mobility and urban development. She visited top-ranking cities on livability indices and has presented published papers at international conferences.