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Editorial: National Logistics Policy on Cards

Port Wings, 05 Feb 2020:

The Union government will soon release a National Policy on Logistics. While presenting the Union Budget on 1 February, Nirmala Sitharaman said that the proposed logistics policy, will aim at reducing high transaction cost of industry.

The aim of the national logistics policy is to promote seamless movement of goods across the country. The policy is being worked out by the logistics division under the commerce ministry. The policy, which also aimed at reducing high transaction cost of traders, may propose setting up of a central portal, which will provide end-to-end logistics solutions to companies. The portal will be a single window marketplace to link all stakeholders.

Explaining further, she said the proposed policy will clarify the role of the Centre, states and also key regulators. Over the last few years, the logistics sector has witnessed an enhanced focus from the government. With the introduction of GST, e-Way bill, various infrastructure upgradations and also setting up a separate logistics department, the logistics sector has undergone tremendous transformation.

The adoption of national logistics policy will further have a positive impact on the country’s logistics industry as it will help increase, upgrade and standardize the warehousing capacity and in identifying gaps that could be bridged to bring down the cost of logistics for the industry at large.

Besides, there is proposal to set up a separate fund for start-ups in the logistics sector and to double employment in the sector.

High logistics cost impacts competitiveness of domestic goods in the international markets. Effective implementation of the policy would help provide an impetus to trade, enhance export competitiveness, and improve India’s ranking in the Logistics Performance Index.

In a first the minister announced dedicated “Krishi Rail” to build a seamless national cold supply chain for ‘perishables’, the minister also proposed that the Indian Railways will set up a “Krishi Rail”- through PPP arrangements. The rail system will include refrigerated coaches in express and freight trains as well.

Finance Minister also announced in her budget speech that the “Jal Vikas Marg” on National Waterway-1 will be completed and further the 890 km Dhubri-Sadiya connectivity will be done by 2022”.

Realising the roadways dependence of the logistics industry, the government has proposed to monetise at least 12 lots of highway bundles of over 6000 Km before 2024. 

Pressing the need for infrastructure for the logistics industry she reiterated that the government will invest Rs. 100 lakh crore on infrastructure over the next 5 years.

To thrust the development of roadways she said the development of 2500 km access control highways, 9000 km of economic corridors, 2000 km of coastal and land port roads and 2000 km of strategic highways. Work on Chennai-Bengaluru Expressway will also be started with Delhi-Mumbai Expressway and two other packages to be completed by 2023.

The logistics sector in the country involves 12 million employment base, more than 200 shipping agencies, logistics services, ICDs, CFSs, IT ecosystems and banks& infrastructure agencies.

The cost of logistics for India is about 14 per cent of its GDP and it is far higher as compared to other countries. There is a target to reduce it to 9 per cent in the coming years. The Indian logistics sector provides livelihood to more than 22 million people, improving this sector will help in reducing the indirect logistics cost, leading to exports growth.

 

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