Chanakya IAS Academy Blog

Sagar mala initiative: port-led development

  • The Sagar mala project envisages a model of port-led development
  • It seeks to develop a string of ports around India's coast
  • The Union Ministry of Shipping has been appointed as the nodal ministry for this initiative.

Background and necessity for the Project

  • Ports are gateways to import and export activity.
  • With the current focus of Government on ‘Make in India’ initiative, the export traffic is bound to increase. Hence, world-class ports are needed.
  • Indian ports have been facing multiple problems as discussed in the section below and need an overhaul to become drivers of growth

Problems of ports/shipping

  • The Capacity of ports is overstretched; they can’t meet increasing demands of merchandize trade
  • Low investment in capacity addition in the past
  • Inadequate infrastructure for basic services at ports and outdated equipment
  • Large turnaround times at Indian ports make them uncompetitive
  • Low labour productivity and level of training at the ports
  • Lack sufficient draft at the ports for large tankers. Hence, cargo from large tankers have to be transferred to small tankers for reaching the ports. This increases transport costs substantially
  • Weak hinter land connectivity including inefficient evacuation systems increase transportation costs
  • Unfriendly taxation regime and rigid laws deter exporters

About Sagar mala

  • The project is aimed at transforming existing ports into world class ports as well as developing new world class ports
  • It envisages developing ports and effective hinter land evacuation systems (via road, rail, coastal waterways) which would lead to ports being the drivers of economic activity in the regions
  • It would also integrate the ports with Industrial and Freight corridor projects, reducing the logistics costs and making exports more competitive.

Components of project

The Sagar mala initiative will address challenges by focusing on three pillars of development, namely:

  • Port Modernisation: The existing ports to be transformed into world class ports as well development of new world-class ports
  • Efficient Evacuation Systems: Development of efficient rail, road and inland water transport networks to and from hinter land to be undertaken.
    • Policies for promotion of coastal/inland shipping to be developed.
    • Promotion of usage of electronic channels for information exchange leading to quick, efficient, hassle-free and seamless cargo movement.
  • Coastal Economic Development: Development of Coastal Economic Zones (CEZs) for encouraging economic activities in coastal regions.
    • synergising and coordinating with State Governments and line Ministries of Central Government through their existing schemes and programmes such as those related to community and rural development, tribal development and employment generation, fisheries, skill development, tourism promotion etc.

Organisational framework

  • The project envisages an organisational framework for Centre and States to work together under the principles of "cooperative federalism".
  • National Sagar mala Apex Committee-
    • To be chaired by Minister in charge of Shipping. The Cabinet Ministers from stakeholder Ministries and Chief Ministers/ministers in charge of shipping of maritime states
    • for overall policy guidance and high-level coordination
    • to review key aspects of planning and project implementation
    • committee will prepare the National Perspective Plan for the project.
  • Sagarmala Coordination and Steering Committee-
    • shall be constituted under the chairmanship of the Cabinet Secretary with Secretaries of the Ministries of Shipping, Road Transport and Highways, Tourism, Defence, Home Affairs, Environment, Forest & Climate Change, Departments of Revenue, Expenditure, Industrial Policy and Promotion, Chairman, Railway Board and CEO, NITI Aayog as members.
    • will provide coordination between various ministries, state governments and agencies connected with implementation and review the progress of implementation of the National Perspective Plan
  • Sagar mala Development Company-
    • will be set up under the Companies Act, 1956 to assist the State level/zone level Special Purpose Vehicles (SPVs), as well as SPVs to be set up by the ports, with equity support for implementation of projects to be undertaken by them

Benefits of port development

  • Ports will be drivers of a developed coastal economy via Coastal Economic Zones (CEZs). It will a model of sustainable economic development for the population living in coastal areas.
  • Exports can be made more competitive by effective hinter land connectivity with ports there by reducing costs
  • India can earn substantial foreign exchange via port services across its long coastline if can have a network of world-class ports
  • The project targets to provide one crore employment. Port-led development has potential for direct employment generation for 40 lakh persons and for 60 lakh persons indirectly.
  • Also, the Sagar mala Project is clearly well aligned with other key-government projects such as Smart Cities, Namami Gange and Make in India


  • Vision on Coastal Shipping has been released. Coastal shipping pacts with Bangladesh are also a step in the right direction.
  • The National maritime development programmes for deepening drafts of major ports is under progress
  • Recently, the government has decided to halve the previously estimated 10-year time frame to complete the Sagar mala port development project; now it will be completed in 5 years
Read 477 times Last modified on Monday, 20 June 2016 17:49
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