National Logistics Policy: What makes it so relevant and how PM Gati Shakti gives the right thrust

“To ensure quick last mile delivery, end transport-related challenges, save time and money of the manufacturers, prevent wastage of the agro-products, concerted efforts were made and one of the manifestations of those efforts is the National Logistics Policy,” Prime Minister Narendra Modi said on 17 September, 2022 while launching this policy.

Launched on the same day as the re-introduction of the cheetah in India, the prime minister referred to the event by saying that luggage should move quickly like a cheetah while noting that currently logistical costs account for 13 to 14 per cent of India’s GDP, almost double of what the costs are in many developed countries. From 13-14 per cent logistics cost, the aim is to bring it to single-digits as soon as possible. This, in a way, is a low-hanging fruit, if we have to become globally competitive. Logistics broadly includes facilities crucial to trade: transport services for the movement of goods, storage facilities that are particularly essential for trade in perishable goods such as food items, fruits, and vegetables, and smooth functioning of government services that facilitate trade such as licensing and customs.

Modi noted that in India, which has become the fifth-largest economy in the world, things are changing rapidly. The prime minister also said, “The echo of Make in India and India becoming self-reliant is everywhere. India is setting big export targets and is also fulfilling them. The notion that India is emerging as a manufacturing hub, is stabilizing in the mind of the world. If we study the PLI scheme we will find that the world has accepted it.”

The National Logistics Policy is a combination of policy plus performance, which is equal to progress and is the result of eight long years of hard work. Schemes like Sagarmala and Bharatmala expedited the work of Dedicated Freight Corridors (DFCs) to improve logistical connectivity for systematic infrastructure development. The total capacity of Indian ports has increased significantly and average turnaround time of container vessels has come down from 44 hours to 26 hours. For promoting exports, 40 air cargo terminals have been constructed. Also 30 airports have been provided cold-storage facilities while 35 multimodal hubs are coming up in the country. Many new waterways are also being built in the country for eco-friendly water transportation. Kisan Rail experiments during Corona in 2021, were a big success. Additionally,today 60 airports have the facility of Krishi Udan.

The Modi government has worked towards initiatives like paperless EXIM trade process through e-sanchit, faceless assessment for customs, provisions for e-way bills, FASTag etc., that have greatly increased the efficiency of the logistics sector. Change in drone policy and connecting it with the PLI scheme is promoting the use of drones in the logistics sector.

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PM Gati Shakti National Master Plan will be supporting the National Logistics Policy in all earnest. A huge data of information related to different infrastructure projects of state governments has been prepared. Today, data from Central and state governments in about 1,500 layers are coming onto the PM Gati-Shakti portal. The talent that will come out of the recently approved Gati Shakti University will also help a lot. The PM Gati Shakti Plan, a Rs 100 lakh crore national infrastructure master plan, will lay the foundation for holistic infrastructure and give an integrated pathway to our economy. A single platform was launched for ministries to monitor the progress of various infrastructure projects under this plan. The Modi government is aiming at adding over 200 airports, helipads and water aerodromes where aircraft can land, over the next four to five years, besides nearly doubling the existing natural gas pipeline network of around 19,000 km.

Today, the world is looking at India as a democratic superpower. Be it service sector, manufacturing sector, automobiles, electronics, India under Prime Minister Modi is setting big goals in every sector and achieving them too. Be it India’s agricultural products, India-made mobiles or India’s BrahMos missile, “Make in India” is an unabashed success story. Made in India Covid vaccines and medicines helped in saving millions of lives both locally and across the globe.

For the products manufactured in India to dominate the world market, it is crucial to have a strong support system. The National Logistics Policy will greatly help in modernising this support system. Strengthening of the logistics sector will not only make the life of the common man easier but will also help in increasing the respect of labour and workers. NLP has immense potential for the development of infrastructure, expansion of business and increasing employment opportunities.

The need for a national logistics policy was felt since the logistics cost in India is high compared to other developed economies.

Since 2014, the government has put significant emphasis on improving both, Ease of Doing Business and Ease of Living. National Logistics Policy, a comprehensive effort to address issues of high cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem, is yet another step in this direction. The policy is an endeavour to improve the competitiveness of Indian goods, enhance economic growth, increase employment opportunities, value addition, enterprise and economies of scale.

It has been the vision of Prime Minister Modi to develop world-class modern infrastructure through the integration of all stakeholders via holistic planning and implementation so that efficiency and synergy are achieved in the execution of the project. The PM Gati-Shakti National Master Plan for muti-modal connectivity launched last year was a pioneering step in this direction. PM Gati Shakti will get further boost and complementarity with the launch of the National Logistics Policy.

In a Ministry of Commerce and Industry survey last year, titled Logistics Ease Across Different States, Gujarat and Haryana were ranked among the top states. The parameters included were the quality of road and railways infrastructure, road freight rates, quality of warehousing infrastructure, etc. The survey suggested that states should focus on areas such as developing sector-specific skilling infrastructure and streamlining logistics-related approval and clearance processes. The new logistics policy has four features: Integration of Digital System (IDS); Unified Logistics Interface Platform (ULIP); Ease of Logistics (ELOG); and System Improvement Group (SIG). Under the IDS, 30 different systems of seven departments are integrated – including data from the road transport, railways, customs, aviation and commerce departments.

A Unified Logistics Interface Platform (ULIP) will bring all the digital services related to the transportation sector into a single portal, freeing the exporters from a host of very long and cumbersome processes. Similarly, a new digital platform Ease of Logistics Services (E-Logs) has also been started for industry associations to resolve issues by reaching out directly to the government. Various programmes and schemes aimed at improving logistics such as the FASTag for electronic toll tax collection and faceless assessment for customs are underway.

As per the NLP, financial and fiscal incentives through review of GST rates and regulatory interventions to promote multimodal transportation, optimal modal mix and energy efficiency through the adoption of technologies will be developed through the relevant line ministries and invoked when feasible and necessary. Targets for achieving the vision of the National Logistics Policy are to reduce the cost of logistics in India, be comparable to global benchmarks by 2030, improve the Logistics Performance Index ranking and endeavour to be among the top 25 countries globally by 2030. Creating a data-driven decision mechanism for an efficient logistics ecosystem is the hallmark of the NLP and the Modi government is fully committed to outperforming on this front.

The author is an economist, National Spokesperson of BJP and bestselling author of  The Modi Gambit. Views are personal.

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