Development Watch – Week #1 July ’24
Development News
MMRDA pact with KfW Bank for 850 Crores financing
The Mumbai Metropolitan Region Development Authority (MMRDA) has entered into an agreement with KfW Bank. KfW is a German, state-owned development bank to raise over Rs. 850 Crores to support development of urban infrastructure. The funds procured from KfW and MMRDA’s resources will be primarily allocated towards various sustainable development projects within and around the Mumbai Metropolitan Region. These initiatives include the development of green corridors, solid waste management systems, recycling and reuse facilities, and the promotion of renewable energy solutions to address environmental concerns and enhancing the quality of life for residents in the bustling metropolitan area.
Air India to set up pilot training school in Amravati
Air India is setting up South Asia’s largest Flying Training Organization (FTO) at Amravati in Maharashtra. This is part of an initiative by Maharashtra Airport Development Company (MADC). The aviation landscape in India is witnessing a transformative phase with major players like IndiGo, Akasa, Air India, and the GMR group investing in extensive training programs to meet the surging demand for skilled pilots and engineers. Air India’s Amravati pilot training school is set to be operational by Q1 FY26. IT may be noted that airlines in India have placed orders for more than 1,200 planes. GMR Aero Technic has invested Rs. 50 Crores to start its own school for engineers.
Railways to invest Rs. 1 Lakh Crores in Odisha
New Railway Projects worth Rs. 1 Lakh Crore will be implemented in Odisha in the next 5 years. Though many mega railway projects were sanctioned, they were delayed due to land acquisition issues. In Odisha, the State government’s focus on railway projects and infrastructure development, aims to enhance connectivity and economic growth. The state stands to benefit from new initiatives like electronic manufacturing and semi-conductor training centres. This ensures technological advancement and skill enhancement for its residents.
Shortage of 45,000 labourers and Engineers in L&T
L&T Group is facing a manpower shortage of over 45,000 labourers and engineers across its business. The EPC business is grappling with a labour shortage of 25,000 – 30,000 labourers. The IT and ITES business, L&T Infotech, is also facing a shortage of 20,000 engineers. The prospects of higher earnings is leading Indians to go abroad in hostile places like Russia Ukraine or Israel in search of employment opportunities. Labour shortage can also be attributed to issues like demand for certain skill sets where there might be a lack of availability. Adverse weather conditions have also led to changes in working hours.
EV makers seek stable incentives from Budget ’24
There are expectations from the Union budget in the 3rd edition of the government scheme to promote adoption of electric vehicles. A section of EV makers said they want a subsidy policy with a definite timeline, rather than once that would be abruptly cut off like the previous one. The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme was originally launched in 2015 to encourage the adoption of electric and hybrid vehicles. Under FAME, a subsidy was provided to EV makers who used it to lower the prices of their products. The 2nd edition, FAME-II, was introduced in 2019 and went on till March 2024, when it was scrapped. There has since been a steep slowdown in EV sales. This is according to a report by the Federation of Automobile Dealers Associations.
Hike in Rural Housing subsidy by 50%
India plans to increase state subsidies on rural housing in the upcoming federal budget by 50% from the previous year. This would amount to more than $6.5 billion. This initiative aims to address rural economic distress and boost infrastructure spending, including village roads and job programs. There are challenges in the agricultural sector. It may be noted that there is widespread economic distress, driven by higher food inflation and sluggish growth in farmers’ incomes. Under the PM Awas Yojana (Rural) Housing scheme, the government aims to facilitate construction of an additional 20 million houses over the next few years.
Decline in Poverty in India
Poverty in India is estimated to have declined to 8.5% in 2022-24 from 21.2% in 2011-12, despite the challenges posed by the pandemic. This is according to research paper by the economic think tank NCAER. The paper is titled “Rethinking Social Safety Nets in a Changing Society”. It uses data from the newly completed Wave 3 of India Human Development Survey (IHDS) as well as data from Waves 1 & 2 of the IHDS. Poverty declined between 2004-05 and 2011-12 and 2022-24. Economic growth and poverty decline create a dynamic climate that requires nimble social protection programmes. The government has to ensure social protection keeps pace of social transformation to provide equitable development.
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.