UP amid top five states with high investment in transport services sector in India: ASSOCHAM

37% investments in transport services sector in UP remain non-starter

With a share of about 6.4 per cent, Uttar Pradesh (UP) has garnered fourth highest share in the total outstanding investments attracted by the transport services sector across India, apex industry body ASSOCHAM said.

Industries in the transportation services sector depend highly on the performance of both the national and global economies, which affects manufacturing output, commodity trade, consumer and business spending, and business and leisure travel activity.

Major industries within the transportation services sector include - airlines, trucking, railroads, waterborne transportation, transit and ground passenger transportation, and pipeline transportation. Other services include scenic and sightseeing transportation, transportation support activities such as air and water port operations, postal service, couriers and messengers, and warehousing and storage.

Clocking a compounded annual growth rate (CAGR) of about 15 per cent, UP has attracted total outstanding investments worth over Rs 1.4 lakh crore as of December 2013 in the transport services segment which has grown from over Rs 82,000 crore as of December 2009, according to a sector specific analysis carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

However, the share of UP in total outstanding investments in transport services sector has slightly dipped from about 6.7 per cent as of December 2009 to 6.4 per cent as of December 2013, noted the analysis carried out by the ASSOCHAM Economic Research Bureau (AERB).

UP is grappling with slow rate of implementation of transport services investment. About 37 per cent of investments in the transport services sector in UP are in limbo as of December 2013, said Mr D.S. Rawat, national secretary general of ASSOCHAM while releasing the chamber's state-level analysis.

While over 57 per cent 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, said Mr Rawat. 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 per cent during the course of past five years (2009-2013).

Maharashtra topped with highest share of over 20 per cent in the total outstanding investments attracted by the transport services sector thereby clocking CAGR of about 17 per cent during the course of past five years 2009-2013, besides the state has also slightly improved its share from 19.8 per cent (2009) to 20.4 per cent (2013) during the aforesaid five-year period, highlighted the ASSOCHAM analysis.

The states of Gujarat (8.9 per cent), Tamil Nadu (8.4 per cent), Andhra Pradesh (6.4 per cent each) and Uttar Pradesh are amid top five states in terms of share in total outstanding investments attracted by the transport services sector as of December 2013, it added.

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 per cent as of December 2009, likewise in other states it was - Tamil Nadu (9.2 per cent), Uttar Pradesh (6.7 per cent) and Andhra Pradesh (9.3 per cent).

In terms of growth, Chhattisgarh has ranked on top clocking highest CAGR of over 70 per cent 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 per cent to 1.5 per cent, 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 per cent), Madhya Pradesh (33.2 per cent), Rajasthan (31.9 per cent) and Haryana (29.7 per cent). 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 per cent of projects remained non-starter followed by Punjab (89.2 per cent), Bihar (88.2 per cent), Haryana (80.8 per cent) and Jharkhand (74.6 per cent).

Over 44 per cent 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 per cent households do not own any mode of transport while in urban areas about 37 per cent 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, said the ASSOCHAM's national secretary general.

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

Powered by Capital Market - Live News