Investments in transport services sector growing: ASSOCHAM

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SME Times News Bureau | 28 Mar, 2014
Over 57 percent of investments worth about Rs 13 lakh crore in projects related to transport services are in limbo out of the total outstanding investments worth over Rs 22 lakh crore attracted by the sector across India as of December 2013, according to a just concluded analysis by ASSOCHAM.

"Investments lured by the transport services sector across top 20 states in India, on an average have been growing at a compounded annual growth rate (CAGR) of about 16 percent during the course of past five years (2009-2013)," according to a sector specific analysis carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

"Maharashtra topped with highest share of over 20 percent in the total outstanding investments attracted by the transport services sector thereby clocking CAGR of about 17 percent during the course of past five years 2009-2013, besides the state has also slightly improved its share from 19.8 percent (2009) to 20.4 percent (2013) during the aforesaid five-year period," said D.S. Rawat, secretary general of ASSOCHAM said in a press release on Thursday.

The states of Gujarat (8.9 percent), Tamil Nadu (8.4 percent), Uttar Pradesh and Andhra Pradesh (6.4 percent each) are amid top five states in terms of share in total outstanding investments attracted by the transport services sector as of December 2013, noted the analysis undertaken by the ASSOCHAM Economic Research Bureau (AERB).

Interestingly, apart from Maharashtra, all other states (amid top five) have witnessed decline in terms of their share during the course of past five years i.e., the share of Gujarat in total outstanding investments was 11.9 percent as of December 2009, likewise in other states it was - Tamil Nadu (9.2 percent), Uttar Pradesh (6.7 percent) and Andhra Pradesh (9.3 percent).

In terms of growth, Chhattisgarh has ranked on top clocking highest CAGR of over 70 percent as the outstanding investments in transport services attracted by the state increased significantly from over Rs 3,800 crore as of December 2009 to over Rs 32,200 crore as of December 2013, besides the state also managed to improve its share from 0.3 percent to 1.5 percent, further highlighted the ASSOCHAM analysis.

Amid other states that have clocked high growth in attracting investments in the transport services sector include - Bihar (35.6 percent), Madhya Pradesh (33.2 percent), Rajasthan (31.9 percent) and Haryana (29.7 percent). Besides, all of these states have also managed to increase their share, it added.

In terms of implementation, the state of Jammu and Kashmir has 89.3 percent of projects remained non-starter followed by Punjab (89.2 percent), Bihar (88.2 percent), Haryana (80.8 percent) and Jharkhand (74.6 percent).

Over 44 percent of total households in India do not have any mode of transport and largely depend upon public transport services, besides, the situation is even worse in rural areas where over 47 percent households do not own any mode of transport while in urban areas about 37 percent households do not have any mode of transport. "This calls for urgent need to perk up the transport services scenario across India."

Proper implementation of transport services projects is the need of the hour considering its positive impact on providing better accessibility, employment opportunities together with social inclusion, further noted the ASSOCHAM analysis.

Public private partnership (PPP) is the most suitable model for transport services’ development in India, besides, infrastructure development, promotion of green-energy based transportation and extension of financial incentives like tax sops to industrialists willing to invest in transport related services in rural and other backward areas are certain key measures to spruce up transportation scenario across India, it added.

It is imperative to upgrade transport services segment while considering the environmental and economic demographics to take Indian transport sector to the next level as part of a comprehensive and sustainable policy for meeting the country’s transport requirements.

There is a need to bring in expertise within the whole transport system from policy making to designing and execution.