Commerce minister calls for holistic planning of infrastructure for logistics sake
28 Jun 2019
All new road, railway, airport and shipping port projects being considered in the country must involve the logistics department as part of a wider consultation process, so that holistic planning will be possible. This will help quicker freight movement and cost rationalisation, besides improved passenger experience, commerce minister Piyush Goyal has said.
Reviewing the draft National Logistics Policy and the proposed action plan for implementation of the policy prepared by the Department of Logistics, union minister of commerce and industry and railways, PiyushGoyal, said the policy is aimed at reducing the logistics cost from the present 14 per cent of GDP to less than 10 per cent by 2022.
The draft National Logistics Policy has been prepared in consultation with the ministries of railways, road transport and highways, shipping and civil aviation. Inputs by 46 partnering government agencies (PGAs) were also analysed in detail for consideration in the policy, he said.
In his opening remarks, Goyal urged all the four ministries and their departments to leverage existing infrastructure to support each other in the logistics chain. This will not only help in maximizing capacity utilisation but also reduce costs, he added.
He directed that all four ministries must work in coordination so that the 14 per cent logistics cost may be brought down further to 9 per cent. In the meeting all aspects of logistics related to railways, civil aviation, shipping and inland waterways, road transport, ropeways warehousing and cold chain were discussed in detail.
Goyal said all efforts must be made for farm produce of food grains, fruits and vegetables to reach from farm to market with minimum wastage of time. He also said that a central scheme for cold chain across the country especially for fruits, vegetables and perishables may be made part of the action plan of the draft logistics policy so that it improves efficiency and reduces the loss in agri produce of farmers.
The review meeting also discussed at length issues relating to rail freight rationalisation and freight policy for Dedicated Freight Corridor (DFC), having immediate implications for modal shift.
India’s logistics sector is highly fragmented and very complex with more than 20 government agencies, 40 PGAs, 37 export promotion councils, 500 certifications, 10,000 commodities and a market size of $160 billion.
It also involves 12 million employment base, 200 shipping agencies, 36 logistic services, 129 ICDs, 168 CFSs, 50 IT ecosystems and banks and insurance agencies. Further, 81 authorities and 500 certificates are required for EXIM.
As per the Economic Survey 2017-18, the Indian logistics sector provides livelihood to more than 22 million people and improving the sector will facilitate 10 per cent decrease in indirect logistics cost leading to the growth of 5 to 8 per cent in exports. Further, the survey estimates that the worth of Indian logistics market would be around $215 billion in the next two years compared to about $160 billion currently.
The commerce and industry ministry is formulating the logistics policy so that India’s trade competitiveness grows, more jobs are created, India’s performance in global rankings improves and paves the way for India to become a logistics hub.