PORT DEVELOPMENT: RELATIONSHIP BETWEEN PORT TRAFFIC OF GUJARAT AND ITS HINTERLAND

Abstract

The ports are nodal points that link the open economy with the global world and consequently port development and economic development are closely related. With the developments in multimodal transport and port operations, the benefit of ports percolates even in non coastal areas in far hinterland. In 1990’s, India initiated economic reforms emphasizing on international trade and since then, its international trade has increased remarkably and almost 90% of India’s international merchandise trade is handled by ports. In line with the initiatives of port development in India, Gujarat state has announced a separate port policy for port development as it has vast hinterland of developing northern states of India generating large volume of cargo for ports of Gujarat. This paper attempts to analyse the cargo traffic at ports of Gujarat in relation to the output (GSDP) of selected 8 states of India in its hinterland. Bi-variate Log Log Regression Model is applied to determine the relationship between GSDP of 8 hinterland states and the volume of cargo traffic handled by ports in Gujarat using the GSDP and Port Traffic data from 2011-2019. It is observed that increase in output in the hinterland states leads to significant increase in cargo traffic at ports of Gujarat depicting that 1 % increase in GSDP of Gujarat, Rajasthan, Haryana, Punjab, Himachal Pradesh, Jammu & Kashmir, Delhi and Madhya Pradesh lead to on an average 0.39 % to 0.55 % of increase in cargo traffic at ports of Gujarat which implies that cargo traffic at ports of Gujarat is highly affected by output in its hinterland states in addition to the output of Gujarat..