7th Five Year Plan (Vol-2)
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8.86 Road transport plays an important role in the economy of the country, and is particularly suitable for short and medium distances. It also offers a number of other advantages such as flexibility, reliability, speed and door to door service. Other transport modes too function more effectively when linked to road. Road transport thus forms an indispensable element of the national transportation system.

8.87 The motor vehicle population in the country has been continuously increasing. From just 34,000 in 1950-51 the number of buses has gone up to 2,06,000 in 1984-85, thereby registering an annual growth of 5.4 per cent on average. In the corresponding period, the number of trucks increased from 82,000 to 7,63,000 or say, at an annual rate of 6.8 per cent. The Seventh Plan envisages an annual growth of 8 per cent of both the truck and bus fleets.

8.88 The share of road transport in overall traffic has been continuously increasing and there has been a substantial shift from rail to road over the years. Constraints in capacity on the railways combined with the inherent advantages of road transport and expansion of the road network have contributed to this shift.

8.89 The private sector runs almost the entire trucking industry, and operates about 60 per cent of passenger services. The actual pattern of ownership of buses and trucks is shown in Table 8.9

TABLE 8.9 : Ownership Pattern of Buses and Trucks by Private and Public Sectors

Year Total No. of Buses Percentage ownership (Buses) Total No. of Trucks Percentage ownership (Trucks)
Public Private Public Private
1960-61 56792 31.6 68.4 167649 0.7 99.3
1965-66 73175 36.2 63.8 258977 0.7 99.3
1970-71 93907 39.5 60.5 342577 0.9 99.1
1975-76 114934 49.0 51.0 350393 0.6 99.4
1980-81 153757 45.2 54.8 526608 0.5 99.5
1983-84 191768 40.0 60.0 705000 0.3 99.7
1984-85 206268 38.4 61.6 763000 0.25 99.75

8.90 State participation in road transport commenced in 1950 and was intended to provide efficient and adequate passenger services as well as goods transport to meet, particularly, the needs of hilly and underdeveloped areas, of little interest to private operators. State Transport Undertakings have been formed in every State/Union Territory, and currently 53 SRTUs are operating. Their total fleet strength as of March, 1985 was 79204 buses with a total investment of over Rs. 2,800 crores and a direct employment of over one-half million; and they carry about 41 million passengers per day.

8.91 The physical and operating efficiency of SRTUs has on the whole improved over the past decade as shown in Table 8.10. However, there are some undertakings in which productivity has been stagnant, or even been declining.

8.92 Although the operating efficiency of the SRTUs has improved, their overall financial results are disappointing. Almost all of them are incurring losses. The total accumulated losses of SRTUs as on 31-3-1984 were Rs. 1298 crores. The absence of a standard cost based fare structure and lack of timely adjustment of fares in response to changes in input prices is the major cause of these losses. Losses are also partly attributable to operations of uneconomic routes for social reasons, and in certain cases the incidence of taxation.

Seventh Plan

8.93 In the interest of optimal use of existing resources, it would be preferable to consolidate existing SRTUs than to provide for their further proliferation during the Seventh Plan. As such, concentration on replacement programmes acquires particular importance, more so when an estimated 59,000 buses would have to be phased out in the Seventh Plan. This necessary fleet replacement will involve an investment of Rs 1800 crores. A susbstantial amount would be required, moreover, for a modest augmentation of the fleet. Considering the demand for passenger transport in the context of the difficult resources position the alternative of private operators meeting the shortfall would be actively pursued, within the framework of an assured policy regarding the future role of private transport.

8.94 Productivity of road transport needs to be improved. Measures to be taken in this regard include replacement of overaged fleet, provision of maintenance facilities and inservice training of staff and improved management and operational practices.

8.95 The fare structure of SRTUs should be revised and brought in line with cost structure. The SRTUs should have the freedom and flexibility to revise fare structure, as suggested in the case of rail, to accommodate standard cost escalations. At the same time, care should be taken not to allow fare increase to cover up inefficient operations.

8.96 There is need to rationalise the structure of taxes levied by the State Governments. Their incidence on SRTUs tends to be susbstantial, particularly in certain States.

TABLE 8.10 : Productivity Indicators of State Road Transport Undertakings

1971-72 1974-75 1978-79 1980-81 1984-85
Fleet utilisation (%age of Buses on road to total Buses)  76 77 79 83 85
Labour producitivity (Kms. per worker per day) 22.4 26.3 26.3 27.3 28.9
Vehicle productivity (Kms. per day per vehicle owned) 165 179 197 214 222

8.97 SRTUs should be declared a priority sector for access to institutional finance. SRTUs are financed by banks, LIC and IDBI, as well, by Central and State Governments. For optimal allocation and utilisation of these sources, it may become necessary to consider establishment of a single financing and performance monitoring agency at the Centre. To begin with it will be desirable to encourage state industrial finance corporations to finance SRTUs.

Freight Transport

8.98 Trucking industry is predominantly in the unorganised private sector, and bulk of truck operators are single truck owners. The operators face many irritants, like levy of mulitpoint octroi, which impede the free flow of goods traffic, that need to be removed. Organisational improvements with a view to encourage pooled operations through corporations and limited companies should go a long way to get better utilisation of the available transport capacity. Another area which requires attention is the setting up of truck terminals and transhipment points at identified locations. Overloading of vehicles needs to be checked firmly to prevent extensive damage to the already overstressed and underpaved carriageway.

8.99 In the non-mechanised sector, there are nearly 15 million bullock carts in the country carrying an estimated 900 million tonnes of orginating traffic with a lead of 10 Kms. While these carts would continue to be an optimal means of transportation within a limited radius, the need for motorised services in the rural areas would also be growing. These services would be economical if vehicles are equipped to carry both passengers and goods.

Urban Transport

8.100 Metropolitan cities and even medium size cities are facing congestion and traffic jams. Every effort would be made to divert traffic from personalised modes to public transport. At the same time, bus availability would be improved partly through rationalisation of routes, and proper maintenance. Also, permitting private operators to ply in urban areas would help raise some capital in an area where investments are urgently needed. City transport services cater to special needs and should be delinked from mofussil services of SRTUs and run as independent operations.

8.101 Provision of transport facilities has to be integrated with land use planning, which is particularly important for small and medium size cities. It is also essential to prepare perspective transport plans for all cities so as to avoid fragmented, costly and often partial solutions.

8.102 There should be greater emphasis on electrically powered public transport system. As such, a pilot project for electric trolley bus services would be taken up to gather data and examine on its economic and operational characteristics. If found successful, this mode could then be usefully introducted in other cities. Inter-modal studies also need to be taken up during the plan period, in order to identify the problem areas and plan for remedial steps. Preponderance of overaged vehicles of outmoded designs and obsolete technology, invariably loaded beyond permissible limits plying on poor road surfaces under hazardous traffic conditions—such is the picture that road transport presents today. The need for improvement is ubiquitous—be it in the case of engine technology, or energy conservation, or else road safety. Fortunately, the automotive sector is now poised for technology upgrada-tion, which should cover induction of multi-axle and truck-trailer combintion vehicles with light weight bodies. Energy conservation measures would include fuel efficient engines and improvement in driving methods and operational practices. Driver training schools would be set up to impart training in driving and road safety.

8.103 Road accident rate in India is one of the highest in the world, causing an economic loss of a substantial order. To reduce the incidence of accidents a variety of traffic safety measures would be pursued: establishment of driver training schools; use of special equipment for testing drivers during licensing; use of equipment for checking performance of vehicles; use of equipment for checking overspeeding and use of equipment for checking drunkenness.


8.104 An outlay of Rs. 70 crores was provided in the Sixth Plan under the Central Sector of which an amount of Rs. 68 crores was for Delhi Transport Corporation. As against this outlay, the anticipated expenditure is estimated at Rs. 171.91 crores. The reason for this excess expenditure over outlay is the transfer of the funding of Centre's matching contribution to State Road Transport Corporations from Ministry of Railways to Ministry of Shipping and Transport. During the Seventh Plan, an outlay of Rs. 203.93 crores as indicated in Annexure 8.2 is allocated to the Central Sector, out of which a provision of Rs. 100 crores is set aside for the Delhi Transport Corporation. The DTC will give priority for replacement of overaged vehicles during the Seventh Plan. The prevailing fare structure of DTC is quite uneconomic and unless it is revised, DTC will continue to incur losses.

8.105 Under the scheme of Central Government's matching contribution to the State Road Transport Corporations registered under the Road Transport Corporations Act, 1950 a provision of Rs. 65 crores only is made pending a review of this scheme. In the State Sector, including the Union Territories, an outlay of Rs. 1786.18 crores is allocated during the Seventh Plan against the Sixth Plan outlay of Rs. 1125.55 crores. Priority would be accorded to replacement of about 59,000 overaged buses during the plan period, together with augmentation of workshop facilities.



8.106 There are 10 major ports and 139 minor/intermediate ports located on the vast coast line of 5560 kms. These ports serve as transhipment points between sea and surface transport and points of entry and exit for import and export trade. The successive plans have sought to build up capacity of the ports to match the growing needs of sea borne trade. Upgradation of existing ports and construction of new ports have been parts of this process.

8.107 The traffic handled at the major ports increased from 19.2 million tonnes in 1950-51 to 106.73 million tonnes in 1984-85. Portwise traffic growth over the period is given in Table 8.11

8.108 Traffic at Calcutta has levelled off over the years; the increase in recent years, has taken place only at Haldia. Bombay, Kandia and Madras, however, have emerged as the leading ports. The composition of traffic has undergone significant changes as shown in the Table 8.12

POL and iron ore traffic have registered significant growth during the last 35 years and at present account for 71 per cent of the total traffic handled at major ports. On the other hand, foodgrains traffic, as a consequence of increasing self reliance, has dwindled. A recent phenomenon is the growing trend of container traffic which is likely to increase substantially in the Seventh Plan.

TABLE 8.11 : Volume of Traffic at major ports
(Million tonnes) 
Ports 1950-51 1960-61 1979-80 1984-85
1. Calcutta/Haldia 7.6 9.4 8.56 10.18
2. Bombay 7.0 14.3 16.57 25.20
3. Madras 2.2 3.0 9.98 15.00
4. Cochin 1.4 2.0 5.46 3.92
5. Vishakhapatnam 1.0 2.8 10.23 12.87
6. Kandia 1.6 7.27 15.75
7. Mormugao 6.4 14.80 14.51
8. Paradip 2.31 2.14
9. New Mangalore 0.90 3.38
10. Tuticorin 2.41 3.78
11. Nheva Sheva (ongoing Project) Total:— 19.2 39.5 78.49 106.73

TABLE 8.12 : Commoditywise traffic at major ports

(In million tonnes)
Commodity 1950-51 1960-61 1979-80 1984-85
POL 3.10 10.90 28.78 49.73
Iron Ore 6.30 23.18 26.00
Coal 2.70 2.10 2.05 4.50
Fertilisers (including raw materials) 0.30 0.60 6.36 6.00
Foodgrains 3.40 5.10 1.20 1.10
Containers 3.23
General Cargo 9.70 14.50 16.92 16.17
Total:— 19.20 39.50 78.49 106.73

Seventh Plan

8.109 The Seventh Plan projection and the capacity build up required to serve this traffic are set out in Table 8.13.

TABLE 8.13 : Commoditywise port capacties and traffic projections
(In million tonnes)

Commodity Capacity as on
Projected traffic
for VII Plan
Capacity addition
during VII Plan
Capacity as
on 31-3-90
POL 55.25 67.35 16.50 71.75
Iron Ore 41.50 26.00 41.50
Fertilizers (Including raw material) 3.90 12.18* 4.10 8.00
Coal 6.25 10.55* 2.20 8.45
Other break bulk 22.35 21.65 0.10 22.45
Container 3.48 9.30 5.82 9.30
Total:— 132.73 147.03 28.72 161.45

* Figures for fertiliser (including raw material) and coal include cargo handled at specialised fertiliser and coal berths and also such cargo handled at general cargo berths'  It will be seen from the table that additional capacity is required for POL and container traffic; for iron ore, however, capacity is more than adequate. Alongwith capacity build up, another major task would be to provide deeper drafts at selected ports to handle larger ships.

8.110 The portwise capacity and traffic projections at the end of the Seventh Plan is presented in Table 8.14.

TABLE 8.14 : Port Capacities and Traffic
(In million tonnes)

Port As on 31-3-1985 As on 31-3-1990
Traffic Capacity Traffic Capacity
Calcutta/Haldia 10.18 14.36 15.95 20.11
Paradip 2.14 4.85 4.83 6.05
Vizag 12.87 12.70 17.76 16.70
Madras 15.00 16.41 16.81 21.37
Tuticorin 3.78 5.45 7.26 6.65
Cochin 3.92 7.11 7.80 7.71
New Mangalore 3.38 9.30 3.74 9.55
Mormugao 14.51 16.10 15.17 16.10
Bombay 25.20 26.25 28.60 28.11
Kandia 15.75 20.20 23.86 23.20
Nheva Sheva 5.25 5.90
Total:— 106.73 132.73 147.03 161.45

The capacity of major ports is likely to increase from 132.73 million tonnes at the end of the Sixth Plan to 161.45 million tonnes by the end of the Seventh Plan as against an anticipated traffic of 147 million tonnes. The major increases in capacity will take place at Haldia, Madras, Vishakhapatnam and Nheva Sheva mainly to handle POL, fertilisers and container traffic. .The port capacity at the end of Seventh Plan would generally be adequate to deal with the projected level of traffic.

8.111 While planning out capacity, bunching of ship arrivals and limited scope for interchangeability of berths between different categories of commodities should be kept in view. Hence at any given point of time, port capacity should contain a margin of reserve beyond normal demand.

8.112 The following are the broad objectives for the development of ports during the Seventh Plan:

  1. Development of infrastructure to match the type and size of vessels as also the volume and types of cargo.
  2. Planned modernisation of port facilities and use of updated technology.
  3. Expansion of facilities to handle at least 50 per cent of the general cargo in containerised form.
  4. Deepening of drafts at selected major ports to receive larger vessels.
  5. Improvement in productivity of labour and equipment for efficient port operations.
  6. Development of selected minor ports as an integral part of the overall port system.

8.113 Port infrastructure has generally lagged behind fast changing shipping technology, especially in regard to the handling of container traffic. Ports are not only ill equipped but also the cost of container handling at most ports tend to be very high. in the Seventh Plan modernisation of port and cargo handling facilities especially to handle container traffic, will receive priority. The Plan will provide for establishment of container freight stations as well as Inland Container Depots and standardisation of equipment and faclities to facilitate smooth transhipment of containers. The concept of multi-purpose terminals would be adopted to blend modern cargo handling techniques with conventional operations. The development of containerisation will also necessitate rationalisation of container handling charges and tariff structures at major ports.

8.114 The severe draft limitations at several ports have restricted entry of modern large ships. Deepening of drafts at selected ports to allow large container cellular vessels as well as large tankers and ore vessels would be taken up on a priority basis.

8.115 The existing levels of output in terms of cargo transferred or handled across berths are relatively low and the port productivity is a matter of major concern. The main reasons for this are the bunching of arrivals of vessels and low labour productivity etc. In the Seventh Plan efforts will be made to reduce the ships' idle time at the berths and the pre-berthing waiting time. The present norms for utilisation of cargo handling equipment are outmoded and would be updated to set higher productivity standards.

8.116 Labour productivity at the ports happens to be extremely low and is to be optimised through extensive manpower training to enhance skills and managerial capabilities and integrating dock and port labour to facilitate optimal manpower interchangeability. The labour productivity norms as well as the manning scales will be reviewed from time to time so that labour performance can beJRiproved.

8.117 Selected minor ports would be developed as satellites to major ports as well as to effectively cater to coastal and sailing vessels and help accelerate regional development.

8.118 Dredging capacity would be increased by replacement of overaged dredgers with modern larger capacity dredgers and improved utilisation.

8.119 The concept of providing captive, dedicated berths by the users such as the fertiliser industry, power and coal will also be pursued. Construction and maintenance of such berths by their users is likely to result in more efficient utilisation and throughput. Another area of user investment is the fast growing off shore oil exploration industry and logistic support at oil terminals. The Oil Coordination Committee may invest in providing captive facilities at the ports as well as launches and all weather boats for speedy transportation to oil terminals.

8.120 The existing outdated and inefficient communication system in ports would be replaced by modern ones. Ports may also take steps to introduce computer based management information system to provide prompt services to vessels for cargo handling, billing operations etc.

8.121 There is also a need to conduct hydrographic surveys and prepare modern charts to improve port development activities and open up inaccessible areas to deep draft ships.

8.122 Interface transport links like rail and road would be adequately developed and integrated into a multimodal concept with matching and standardised facilities to allow smooth transhipment and flow of traffic. This is especially necessary in the case of container traffic, where smooth transhipment from exporter to importer is of crucial importance.

8.123 Appropriate financial measures will be taken to improve the viability of the ports. These include pooling of resources of major ports for optimum development of ports sector, rationalisation of port tariff structure to reduce wide inter-port differentials, simplified documentation system, and uniform procedure for auction/sale of impounded cargo as well as uncleared cargo. Due to acute constraint of budgetary resources, non conventional sources of finance for port development will also be considered. Among other measures, consideration will be given to encourage private capital in appropriate areas of investment, such as ship repair facilities and floating dry docks at major ports, container terminals at selected major ports, construction of berths allowing private investors to operate under the overall control of the port and acquisition or lease of sophisticated equipment. It will be necessary to define the conditions'under which private investment is permitted at the ports to enable the use of latest technology under the overall administrative control of the port authorities.

Intermediate and Minor Ports

8.124 Intermediate and minor ports need to be developed as an integrated part of the overall port system in order to increase the port capacity in the country and help accelerate regional development. At present, there are about 139 minor or intermediate ports and the responsibility for their development rests with concerned maritime State Governments.

8.125 The total traffic handled at minor ports has been declining over the years and is now of the order of about 6.8 million tonnes as against about 11 million tonnes in 1970-71. This decline in traffic, in spite of lower port and wharfage charges is mainly due to various technical difficulties and shortcomings faced by minor ports such as slow response to technological change in shipping and cargo handling, shortfall in coastal traffic, inadequate infrastructure facilities like jetties, warehousing, stacking facilities and insufficient internal surface transport links.

8.126 There is, therefore, urgent need for the concerned states to provide adequate funds for the development of minor ports so that they can meet the requirements of the hinterland and effectively cater to coastal and sailing vessels, thus to some extent reducing the pressure on major ports.

Dredging Corporation of India (D.C.I.)

8.127 Dredging is the basic operation in the development and maintenance of ports and harbours and is a continuous process to maintain the requisite depth of water in the approach channels, inner channels and alongside-wharfs.

8.128 Dredging fleet is becoming overaged. More than half of the fleet would be due for replacement during the Seventh Plan. There is also lack of proper repair and maintenance facilities for the fleet. The existing dredging capacity is about 188.50 lakh cubic metres (LM3) as against the requirement of 209 LM3. During the Seventh Plan dredging capacity of 383 LM3 would be required.

8.129 The main thrust during the Seventh Plan would be on replacement of overaged assets, provision of repair facilities and improvement in utilisation and productivity of the dredgers. There should, accordingly be a pooling of dredging equipment owned by various organisations like DCI and the Ports.

Seventh Plan Outlay and Programme

8.130 In the Sixth Plan an outlay of Rs. 575 crores was provided for the Ports Sector. The expenditure, however, was Rs. 626.86 crores. A provision of Rs. 1104.79 crores has been made for the ports sector in the Seventh Plan and detailed sectoral break up is indicated in Annexure 8.3. The continuing schemes of major ports account for Rs. 579 crores including Rs. 402.36 crores for Nheva Sheva Port. The replacement of overaged assets and modernisation of facilities account for another Rs. 185.91 crores, the outlay for addition to capacity being Rs. 189.89 crores. For lighthouses and lightships, a provision of Rs. 30 crores has been made in the Seventh Plan.

8.131 The programmes contained in the Seventh Plan are focussed on completion of essential on-going schemes, replacement of obsolete cargo handling equipment and floating crafts, modernisation and improvement of port facilities including container handling and addition to capacity in the context of projected traffic and cargo mix.

Major Ports

8.132 The main schemes for Calcutta and Haldia relate to modernisation of port railways and the road network, development of infrastructural facilities in and around the dock areas, expansion of container handling facilities and addition to general cargo capacity.

8.133 At Bombay, besides expansion of container handling facilities, it is proposed to improve and modernise the marine oil terminals at Butcher Island and Pir Pau as well as the existing Bombay docks. The construction of Nheva Sheva port would involve a plan outlay of Rs. 402.36 crores, and would substantially add to the port capacity.

8.134 The programme for Madras Port involves completion of the additional oil berth, deepening of the Bharathi Dock and provision of container handling equipment as also an extension to the container berth.

8.135 At Vishakhapatnam the iron ore handling system would be upgraded to handle larger vessels. At Tuticorin, one more coal jetty would be constructed to meet the requirement of the expansion of Tuticorin Thermal Power Station, while at the New Mangalore Port, an additional general cargo berth will be provided.

Minor Ports

8.136 During the VII Plan an outlay of Rs. 125.63 crores has been provided by the maritime states and union territories for the development of minor ports.

8.137 In the Central Sector, the programme for development of minor ports includes a scheme for development and upgradation of selected minor and intermediate ports. An outlay of Rs. 20 crores is provided for this purpose. Steps will be taken to improve port and harbour facilities including draft and berthing requirements.

Dredging Corporation of India

8.138 An outlay of Rs. 95 crores has been provided for the DCI during the VII Plan mainly for replacement of old assets, acquisition of modern dredgers to meet requirements as well as provision of support equipment and dredger repair facilities.

8.139 The main schemes include replacement of 3 overaged dredgers with modern dredgers of higher capacity, procurement of one additional dredger and 2 small portable dredgers to meet the shortfall in capacity requirements. In addition, support crafts and equipment such as work boats, launches and pumps would also be acquired. The dredger repair complex would be established at Calcutta for carrying out repairs to the dredgers and support craft of the DCI.

Andaman Lakshdweep Harbour Works

8.140 An outlay of Rs. 25 crores has been provided for this scheme in the Seventh Plan. It provides for continuing schemes to the tune of Rs. 4.97 crores. The major new schemes relate to construction of break-water and wharf at Mus in Car Nicobar, Rangat, Port Blair Harbour, and at Little Andaman. In the Lakshdweep Islands, the main programme is construction of break-water and protection of harbour at Androth Island.



8.141 Though sizeable, Indian shipping tonnage still does not compare favourably with that of several maritime countries. Indian shipping accounts at present for only one per cent of the total world fleet. Starting from a modest 0.39 million gross registered tonnage (MGRT) in 1950-51 the country has since then acquired a diversified fleet of 6.32 million GRT, the maximum increase of 3.73 million GRT taking place in the seventies. The Sixth Plan witnessed a slow down; only 0.8 MGRT could be added against the target of 2 MGRT.

8.142 In the total tonnage, bulk carriers with a 2.29 MGRT have the largest share followed by tankers and liner ships accounting, respectively, for 1.6 and 1.3 MGRT. So far, however, coastal ships have a total tonnage of only 0.35 million GRT. Both ocean-going and coastal fleet are ageing. By the end of the Sixth Plan 1.647 million GRT, or twenty six per cent of the total tonnage, had already become overaged. During the Seventh Plan, another 1.37 million GRT will be added to this category of vessels, thereby raising the total to 3.02 million GRT or forty-seven per cent of the fleet strength. Moreover, of the total tonnage over four million GRT has become energy inefficient.

8.143 The ownership of the fleet is well dispersed. There are around sixty-six shipping companies, of which two are in the public sector and account for fifty-five per cent of the Indian merchant fleet; the rest are in the private sector. Twelve companies including two public sector companies make up about ninety per cent of the shipping tonnage.

8.144 Indian bottoms carry only forty-one per cent of the country's total seaborne trade. Of this, petroleum crude and products account for the largest part. The share of dry bulk cargo and liner cargo has on an average varied between 26-30 per cent.

8.145 Indian shipping operates within the world shipping environment, and is affected by fluctuations that take place in international maritime trade. The world shipping industry entered into a period of buoyancy after World War II. Large scale ship building was encouraged in various countries and supported by large flows of traditional bulk cargoes such as coal, ore, grains and oil moving across the sea. The first oil crisis of 1973 however arrested this trend. Thereafter, seaborne trade has stopped growing and has undergone a structural change as well. The urge to conserve energy combined with technological progress has led to a shift towards manufacture of lighter, high value, technology intensive products. At the same time OPEC countries have cut back on production, leading to lesser movement of crude, and have also set up refining capacity, preferring to sell products. In the meanwhile, large orders placed for ship building prior to 1973 got executed and a surfeit of ships chased dwindling cargoes. Thus the shipping industry entered into a long slump, except for a spell in 1979, when a reasonable balance between demand and supply in tonnage was achieved. This unexpected spell roused hopes and fresh orders for tonnage were placed. The brief period however ended in 1981; and the shipping industry once again entered a period of slump which is likely to last some years. Thus, the last twelve years have been rather difficult for world shipping. What was attributed at one time as a normal cyclical contraction has actually turned out to be a major and lasting structural shift.

8.146 Indian shipping benefits from internal advantages like lower labour costs and a vast maritime boundary and strong State support. Neverthless, it has been affected by several adverse features, including its own structural weakness. First, the fleet is overaged with resulting high operating costs. Besides, modern foreign vessels having low operating costs can offer lower freight rates and better services. Consequently, they skim off a large chunk of high value cargo from Indian ports. Second, India's geographical position is such that a number of foreign vessels are able to use Indian ports as wayside ports, when returning from Gulf or sailing towards the Far East. Their task is made easier in the absence of proper protectionist measures. Third, while the world is moving rapidly towards containerisation, the Indian container fleet is almost negligible. Fourth, Indian shipping suffers from inadequate infrastructure support like ship repair facilities, dry docking and cargo handling. Lastly, cumbersome and tardy procedures have inhibited the growth of industry in several ways. Delay in purchase and sale of ships is a case in point.

Seventh Plan: Objectives and Thrusts

8.147 The policy in the Seventh Plan would be to rectify structural weaknesses of this sector and build up further on its inherent strength. The aim thus would be to build a modern and efficient merchant fleet to provide a measure of self reliance in foreign trade and save foreign exchange. The strategic emphasis accordingly would be on replacement of overaged and uneconomic ships by modern fuel efficient ships as well as on diversification of the fleet through acquisition of container ships, specialised carriers and crafts to service the off-shore oil industry.

8.148 Addition to the fleet would be selective, keeping in view the long term objective of achieving self sufficiency in tankers and to gain 50 per cent of the dry bulk cargo, and 40 per cent of the liner trade, apart from meeting coastal shipping requirements in full.

8.149 Indian bulk carriers should also try to develop cross trading to a larger extent than at present, as the country has the requisite expertise and lower crewing costs than other countries for success in the area. Cross trading is a good source of earning foreign exchange.

8.150 Improvement in productivity in the shipping sector could be brought about by revamping of communications, data processing and control systems and development of managerial sKills. Besides, improvements in support infrastructure like ship repair facilities and dry docking facilities would be effected.

8.151 Development of adequate infrastructure at the ports is also important for better matching of the type and size of vessels, frequency of services and volume and type of cargo handled. The consequent quicker discharge and faster turn round of vessels, with improvement in throughput of the ports, will help raise efficiency in the shipping industry.

8.152 Indian shipping cannot be expected to function in isolation from the international shipping environment. Most other developed and developing maritime nations provide concessions to their shipping fleet in one form or the other. India would have to consider similar supportive measures. These would include, inter alia, cargo support, priority berthing, strengthening of TRANSCHART operations and preferential allocation of cargo to Indian fleet. Cargo support will have to be specially strengthened in the liner sector, where new container technology has to be introduced in the teeth of competition from well-entrenched foreign shipping lines enjoying several inherent advantages.

8.153 The Indian shipping industry would continue to need assistance to replace its overaged and uneconomical fleet and modernise its operations. While SDFC should, as in the past, play an important role in the financing of tonnage, it is equally necessary to find resources outside the budgetary provision for the shipping industry. Concessional foreign credit would be considered. Further, in the context of the resource constraint, it may even be advisable to take up ships on long-term charters and treat them at par with Indian bulk vessels in all matters relating to TRANSCHART operations. In fact, the eventual acquisition of these vessels upon the expiry of the charter period might turn out to be the most advantageous option. Acquisition of vessels through this method would also be conducive towards rotation of, rather than addition to, total tonnage.

8.154 The industry would be permitted greater flexibility in its commercial operations, particularly with regard to buying and selling of ships as this is a profitable operation and can help generate resources for acquisition of tonnage.

8.155 Non-shipping companies would be encouraged to invest in the shipping industry. Likewise, diversification of shipping companies into non-shipping activities would also be permitted. Such diversification would assist the shipping companies to raise additional resources.

8.156 Rapid development of off-shore oil exploration and drilling has given rise to the growing need for various kinds of support services. Diversification in the off-shore oil sector will help the shipping industry by opening up a new and more profitable area of operations.

8.157 The role of the SDFC would be recast so as to enable it to function as a flexible and specialised financial institution. Such an institution will be able to mobilise resources from open market and provide the necessary funds to the shipping industry.

Acquisition Programme

8.158 The programme in the Seventh Plan would comprise of replacement of overaged tonnage of 2.5 million GRT and acquisition of 0.43 million GRT for which firm orders are under finalisation. With a spill over tonnage of 0.71 million GRT in the pipeline, the operational tonnage at the end of the Seventh Plan would thus be 7.5 million GRT. Orders may also be placed for a tonnage of 0.75 million GRT for delivery in the Eighth Plan.

8.159 During the Sixth Plan, an outlay of Rs. 720 crores was approved for shipping to support the acquisition programme of 2 million GRT. However, due to resource constraints and caution in matter of acquiring the ships, the outlays fell well short of this level, the expenditure during the Sixth Plan being of the order of Rs. 432.94 crores. A large part of the acquisiton programme was accordingly deferred to the Seventh Plan.

8.160 The committed liability of the SDFC for this deferred tonnage (0.71 million GRT) is about Rs. 420.11 crores. The acquisition of 0.43 million GRT would mean further commitment of Rs. 275.87 crores. The total commitment of the SDFC would thus be Rs. 695.98 crores. Replacement of overaged tonnage of 2.5 million GRT would also mean substantial draught on resources. However, due to funding constraints, an outlay of Rs. 693.42 crores only has been provided in the Shipping Sector. This position would be rectified to the extent possible in the Annual Plan allocations depending upon the ability of the Shipping Sector to mobilise resources both from conventional and non-conventional sources and the operational performance of this Sector. Under the State Sector, an outlay of Rs. 133.46 crores has been made for shipping development.



8.161 Coastal shipping is the most energy efficient and comparatively cheaper mode of transport for carriage of bulk traffic over long hauls particularly when the origin and destination of a traffic stream is located along the coast. India has a long coastline of 5,560 kms. Consequently, coastal shipping can play an important role in the integrated transport network of the country, particularly when inland modes are strained. During the Sixth Plan, the target was to increase the coastal tonnage from 0.254 MGRT in 1979-80 to 0.5 MGRT in 1984-85. The actual addition, however, was only 0.10 MGRT, thus taking the total coastal fleet to about 0.35 MGRT by the end of the Plan period. The coastal fleet is ageing fast; about 35 per cent of the tonnage is already overdue for replacement while another 17 per cent will get added to this category in the Seventh Plan.

8.162 Coastal vessels carried 5.5 million tonnes of traffic in 1984-85. Over the years, dry cargo volume, mainly salt and general cargo has declined, while the wet cargo volume has gone up.

8.163 Coastal shipping faces several constraints. The overaged vessels are fuel inefficient and involve high maintenance and operating costs. This has led to increase in bunker costs, operating expenses, higher stevedoring charges and uneconomic freight structure which does not compare well with either rail or road. Furthermore, coastal shipping carries low rated bulk commodities like coal, cement, salt for which railway freight rates are lower, with consequent consumer preference for rail transport.

8.164 Inordinate delays at ports too have affected competitive advantage of coastal shipping. It is estimated that ships spend seventy per cent of their time at the ports. Apart from cumbersome port and custom procedures, other restrictions like inadequate draft have precluded optimal utilisation of shipping capacity. There are also directional imbalances in coastal traffic movement. Thus, empty movement (sailings in ballast) is very often undertaken by coastal vessels following unloading of coal at West Coast ports.

Seventh Plan-Programmes and Policies

8.165 During the Seventh Plan efforts would be made to relieve the constraints affecting coastal shipping operations to the maximum extent possible. Overaged vessels would be replaced with modern fuel efficient vessels. Port procedures would be streamlined to provide priority berthing. Customs clearance procedures now in vogue are cumbersome and time consuming and need to be simplified. Licensing systems of coastal vessels would permit sufficient freedom of operation to enable switch over to overseas trade. The procedure for revision of freight rates would be simplified so that uneconomic rates do not impinge on the viability of the sector. Moreover, an integrated development of coastal shipping, ports and hinterland is required. Since major ports too face bottlenecks in accommodating coastal vessels, a few minor ports would be identified and developed to handle coastal cargo.

8.166 It is estimated that about 7 million tonnes of cargo will move by coastal shipping by the end of the Seventh Plan, the increase in traffic being recorded by coal. To carrying this traffic 0.31 million GRT including replacement of 0.12 million GRT would be required, necessary provision for which has been made in the shipping sector.



8.167 Inland Water Transport (IWT) is the cheapest mode for certain kinds of traffic, both over long and short hauls provided the points of origin and destination are located on water front and no transhipment of goods is involved. It is also one of the most efficient modes of transport from the point of view of energy consumption. Besides, this mode has other inherent advantages as well. It can provide immediate access wherever navigable waterway exists without requiring investment in line haul capacities as in other modes of transport. Inland Water Transport is a labour intensive mode and generates more employment per rupee of investment than any other mode and so particularly benefits weaker sections of the community.

8.168 The share of inland waterways in the country's transport system is one per cent, and the density is 0.44 km. per 100 sq. kms. The navigable inland waterways extend nearly to 14,500 kms. comprising a variety of river systems, canals, backwaters, creeks and tidal inlets, out of which only 5,200 kms. of major rivers and 485 kms. of canals aresuitable for operation of mechanised craft. The present level of waterways traffic is negligible which reveals gross under utilisation of a major transport asset.

8.169 IWT continues to be an important mode of transportation on the river Brahmaputra in the North Eastern Region, the Ganga in Eastern Region, canals, backwaters of rivers of Kerala, Goa and the deltas of Krishna and Godavari. Even in these areas, inland water transport is facing operational constraints including, among others, the following ones:-

  1. Shallow water and narrow width of channels during dry weather, siltation and bank erosions and lack of navigational aids affect free movement of vessels. An analysis of the transit time in the eastern region reveals that due to these constraints as much as two-thirds of the time is wasted in detentions en route.
  2. Little attempt has been made at modernisation of the craft. Most craft used for mechanised operations are overaged and inefficient.
  3. Inadequate coordination in hydel power, flood control, navigation and irrigation projects.
  4. Research and Development along with training has not received due attention.

8.170 Development of inland water transport commenced only from the Second Five Year Plan; and upto the end of the Fifth Five Year Plan, the total expenditure in this sector was of the order of Rs. 34 crores. It was only in the Sixth Plan that this sector was given priority and specific schemes of interstate and national importance for development of inland water transport were taken up. Declaration of certain waterways as national waterways, replacement of overaged vessels, modernisation of dockyard were the highlights of the Sixth Plan. Also, a scheme for grant of subsidy to inland water transport entrepreneurs for acquisition of mechanised vessels and modernisation of the existing crafts including country boats was floated. To support the programme, a provision of Rs. 71.66 crores was made of which an outlay of Rs. 45 crores was in the Central and Centrally Sponsored Sector, and Rs. 26.66 crores in the State Sector. The anticipated expenditure is estimated at Rs. 70.33 crores. While progress in the execution of the Central Schemes was satisfactory, the same was not the case with Centrally Sponsored Schemes. Though a high priority was accorded for replacement of overaged vessels ofCIWTC, if had still fifty-seven overaged vessels out of a total fleet of 136 vessels by end of Sixth Plan.

Seventh Plan-Objective and Policy Thrusts

8.171 The broad objectives for the Seventh Plan would be:

  1. Development of inland water transport in the regions where it enjoys natural advantage.
  2. Modernisation of vessels and country crafts to suit local conditions and
  3. Improvement in productivity of assets.

8.172 The policy thrusts outlined in the plan would help achieve the above objectives.

8.173 The policy of declaring certain waterways as national waterways to boost the development of inland water transport in the country would be continued. The criteria for considering any waterway as national waterway should be its importance as a means of communication and its contribution to the economic development of the area. Such waterways should either carry, or have the potential for attracting substantial traffic.

8.174 Implementation of comprehensive conservancy works for each waterway would be emphasised and a systematic plan would be prepared for conservancy works including hydrographic surveys, maintenance of channels and setting up of navigational aids.

8.175 Since most of the waterways require capital dredging and regular maintenance dredging to maintain the navigable depths, a separate dredging unit for inland waterways would need to be set up.

8.176 In order to facilitate speedy movement of cargo and passengers, integrated terminals at suitable locations on the water fronts would need to be developed and these terminals should have efficient interfaces with other modes of transport. The present practice of creating captive terminals may be counter-productive and many have to be abandoned.

8.177 Replacement of overaged fleet along with reducing the number of inefficient vessels in the fleet would be stressed. As all the overaged vessels cannot be replaced within a plan period due to resource constraint, selective replacement of the overaged vessels is imperative. Proper maintanance of vessels also needs to be ensured to improve productivity.

8.178 Improvement of country crafts and provision of technical assistance to their operators would be taken up with suitable schemes. The question of standardisation of crafts will also be given a high priority.

8.179 There is a continued and sizeable demand for constructing and repairing medium and small size vessels in the counrty. The present capacity in the country needs to be augmented. A special fund at the Centre could be created to provide financial assistance to needy entrepreneurs for the purchase of and/or modernisation of country crafts.

8.180 In order to augment resources for this sector, the possibility of recovering the maintenance cost of waterways through the power tariff needs to be explored where hydel power stations are located in such waterways. In all multi purpose river valley projects, the possible navigation aspect should be kept in view.

8.181 As the backwardness of inland water transport is mostly due to non-application of latest technologies, stress would be laid to upgrade the technologies in the field. R and D would receive special attention during the Seventh Plan period.

8.182 Adequate facilities need to be created to develop trained manpower in inland water transport. For this purpose, assistance should be taken from developed countries.

8.183 There is need to evolve a set of norms for measuring the productivity in inland water transport both on the river service side and on the production side. A proper organisational set up at the State head-quarters is also necessary to collect relevant data and monitor the schemes.

Programmes and Outlays

8.184 In the Seventh Plan, a total outlay of Rs. 225.73 crores is provided of which Rs. 155 crores is in the Central Sector and Rs. 70.73 crores provided under the plans of States and Union Territories.

8.185 Some of the major Central Sector schemes are: acquisition of vessels by Central Inland Water Transport Corporation, development of Rajabagan Dockyard, hyd-rographic surveys of important waterways, acquisition of survey launches, development of national waterways and setting up of Inland Waterways Authority of India. The programme of CIWTC includes acquisition of 83 new vessels including 36 self-propelled barges, 13 tugs, 31 dumb barges and 3 tankers. Of the 83 vessels, 20 vessels orders for which were placed during the Sixth Plan, will be available by the end of 1985-86. Creation of a special fund to provide financial assistance to needy entrepreneurs to purchase modern crafts would be a new scheme in the Seventh Plan. In addition, the scheme of providing interest subsidy to entrepreneurs would be continued.

8.186 The capacity of CIWTC to move cargo would be augmented to 1.1 million tonnes by the end of the Seventh Plan. Efforts would also be made to increase the productivity of the CIWTC. The following productivity norms are envisaged in the Seventh Plan:

8.187 The navigability between Allahabad-Patna stretch on the Ganga would be improved during Seventh Plan period.

8.188 Development and modernisation of Rajabagan Dockyard would receive a high priority during the Plan period. The spillover schemes from the Sixth Plan would be completed in the first year of the Seventh Plan itself. With the completion of the schemes, the ship construction capacity of the Dockyard would increase to 4 vessels and the repairing capacity to 54 vessels per annum. The construction capacity will further increase to 8 vessels per annum by the end of the Seventh Plan.

8.189 Under the Centrally Sponsored Programme, the Central Government would continue to render financial assistance to the States for development of inland water transport.

8.190. In the States and Union Territories Sector, an outlay of Rs. 70.73 crores is provided, with first priority accorded to the replacement of overaged vessels.

8.191 The details of outlays under Inland Water Transport are given in the Annexure 8.4.

Farakka Barrage

8.192 The Farakka Barrage has the primary objective of preservation and maintenance of the Calcutta Port as well as the regime and the navigability of the Bhagirathi-Hooghly system. The Phase I of the project consisting of the Farakka Barrage, the Head Regulator, the FeederCanal and the Jangipur Barrage have been mostly completed. The balance works under Phase II consisting of the lock gates at Farakka, additional gates and stop legs at the main barrage, closure of gaps in the left afflux bund and some new works taken up in the Sixth Plan would be continued in the Seventh Plan.

8.193 The latest cost of the project is Rs 245.85 crores and the expenditure at the end of the Sixth Plan was Rs. 193.49 crores with a carryover of Rs 52.36 crores into the Seventh Plan. The outlay for the Seventh Plan is Rs. 49.30 crores.

Productivity Norms 1984-85 1989-90
Fleet utilisation 72.5% 94%
Load factor 50% 75%
Staff Ratio 1:14 1:11
Turn-round period
Calcutta-Pandu-Calcutta 33 days 24 days
Calcutta-Farakka-Calcutta 15 days 8 days
Calcutta-Karimganj-Calcutta 28 days 18 days
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