PM Gati Shakti Master Plan Reduces India’s Logistics Costs By 5% Of GDP

The PM Gati Shakti Plan has cut India’s logistics costs from 13–14% to 7.8–8.9% of GDP, according to the NCAER report ‘Gati Se Pragati’.

India closes in on global logistics standards

While India’s logistics costs remain higher than the global benchmarks of 6–8% observed in developed economies, the reduction marks a significant stride toward achieving world-class logistics efficiency.

India’s improved ranking in the World Bank’s Logistics Performance Index (LPI), moving from 44th to 38th in 2023, reinforces this positive momentum.

Gati Shakti: A game-changer in infrastructure coordination

The PM Gati Shakti National Master Plan stands as India’s most ambitious initiative for infrastructure coordination.

The programme has created a robust institutional framework and early successes in inter-agency collaboration, aiming to fundamentally transform how the country develops connectivity and supports economic growth.

Seven infrastructure engines drive the strategy

The plan operates through seven key ‘infrastructure engines’:

• Roads
• Railways
• Airports
• Ports
• Waterways
• Mass Transit
• Logistics Infrastructure

Each engine contributes uniquely to India’s connectivity ecosystem. The government has set bold targets, including:

• Expanding national highways to 200,000 km
• Boosting railway freight capacity to 1,600 million tonnes
• Establishing 200–220 new airports
• Achieving comprehensive multi-modal integration

Economic and social benefits

According to the report, every ₹1 invested in infrastructure generates between ₹2.5 to ₹4 in economic output, with roads and railways showing the highest multiplier effects.

The socio-economic benefits also include job creation, regional development, sustainability, and improved quality of life.

Implementation challenges persist

Despite these gains, the programme still faces several challenges:

• Funding gaps
• Regulatory hurdles
• Land acquisition delays
• Coordination issues between central and state agencies

To overcome these barriers, the report recommends:

• Adopting real-time project monitoring systems
• Creating dedicated financing mechanisms
• Encouraging private sector participation through innovative models
• Strengthening capacity-building among implementing agencies

Political will and technology key to future success

The report concludes that the long-term success of PM Gati Shakti hinges on sustained political commitment, adequate funding, and a dynamic approach to project execution.

Enhancing technology adoption, private investment, and institutional efficiency will be critical for accelerating India’s infrastructure-driven economic transformation.

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