In August 2021, India’s Prime Minister Narendra Modi announced that India will spend $1.35 trillion to improve the country’s infrastructure. The infrastructure plan called “Gati Shakti” will create jobs that can potentially reduce poverty in India by increasing household income across the nation and improving the economy at large. The plan also intends to expand the “use of cleaner fuels to achieve the country’s climate goals.”
The Gati Shakti Plan
The specifics of India’s Gati Shakti plan were not immediately announced, but amid the country’s economic decline and the impacts of the COVID-19 pandemic, Modi claims the plan will increase India’s economic output, which decreased by more than 7% in 2020. Specifically, “the plan will help local manufacturers compete globally and create new avenues of future economic growth.” In addition, Gati Shakti will help India “become energy independent by 2047,” by transitioning to “a gas-based economy” and developing India into “a hub for hydrogen production.”
How Better Infrastructure Can Reduce Poverty in India
Studies show a clear link between improved infrastructure and poverty reduction. Better infrastructure may help reduce poverty in India in a variety of ways. Improved infrastructure has the ability to increase economic activity in the country by minimizing “production and transaction costs” and increasing “agricultural and industrial productivity.”
Infrastructure leads to job creation due to the demand for labor in both the development process and the ongoing management and maintenance of the infrastructure. Therefore, impoverished and disadvantaged people can participate in an economy that they once had no place in.
Even though income-related aspects of poverty are at the forefront of the issues better infrastructure addresses, better infrastructure also has non-income advantages, including “health, nutrition, education and social cohesion.” These aspects improve the quality of life for people across the nation. Overall, better infrastructure has the potential to contribute to reaching the United Nations’ 17 Sustainable Development Goals (SDGs).
How Infrastructure Improvements Contribute to SDGs
- SDG 2: Zero Hunger. Malnutrition and food insecurity are significant problems in India, with more than 200 million citizens lacking “sufficient access to food.” Modern infrastructure can help improve people’s access to food by promoting better productivity (particularly among farmers) and by helping to decrease production costs. Decreased production costs can drive prices of food products down, making them more accessible to the impoverished.
- SDG 3: Good Health and Well-Being. Adequate health infrastructure means more people will have access to health care services, especially impoverished people in remote locations. Better health infrastructure will increase the number of in-hospital births, which will reduce both the infant mortality rate and the maternal mortality rate. This reduction will come as a result of the presence of skilled birth attendants and access to hospital equipment in case of emergencies. India’s current infant mortality rate stands at a staggering 28.771 deaths per 1,000 live births.
- SDG 4: Quality Education. Road infrastructure influences the attendance and enrollment of students in schools. This also affects the quality of teachers attracted to a school. More school facilities mean education is more accessible to children in remote locations. More than 27% of Indian youth find themselves “excluded from education, employment or training.” Education infrastructure is essential because education helps people acquire the skills and knowledge to obtain higher-paying, skilled jobs that can help them rise out of poverty.
- SDG 8: Decent Work and Economic Growth. Due to the economic impacts of COVID-19, according to The Indian Express, almost 200 million more Indian people could face poverty by the close of 2021. Ultimately, this means that more than 50% of the Indian population may live in poverty. Under SDG 8 is target 8.7, eliminating child labor in its entirety by 2025. Families tend to resort to child labor when they need extra income to meet their basic needs. India’s infrastructure plan can potentially help reduce poverty in India by providing adults with more job opportunities and by increasing household income, negating the need for child labor. Similarly, parents marry off their young girls to take the economic burden off the household, hoping that the girls’ husbands will economically provide for the girls. However, with increased household income and more employment opportunities, families can bear the costs of taking care of all their children. Then, marriage will be an option and not an economic necessity.
For all these reasons and more, better infrastructure can reduce poverty in India, improving lives throughout the nation.
– Jared Faircloth