National Logistics Policy & India Economy
Logistics policy is a mandate that determines how the processes are going to proceed. It could be a comprehensive policy covering transportation, customs, infrastructure development and trade. The provisions should create a new strategy to minimize bottlenecks in the industry. Over the past few decades, globalization has played an important role in world economic performance by increasing international and domestic trade, which is central to growth and the logistics sector is now recognized as one of the pillars of development. World Bank states reliable supply chains and logistics services efficiencies are critical for competitiveness. This is strongly associated with trade expansion and ability to attract FDI for the economic growth of the Country.
More than 60 percent of the total freight transport in the country is on road, and the industry is extremely fragmented with 85 percent vehicle ownership is with individuals owning less than five trucks
The grand vision of India to be a $5 trillion economy best by 2024 is an ambitious target. Post COVID-19, it is more challenging and would need a great integrated effort by Govt and the industry together. While the economy has contracted, due to the extended COVID-19 impact, the Atmanirbhar Bharat campaign could be the major push to the Make in India programme with a right policy intervention and support to the industry. Increasing the domestic consumption with adaption to the Made in India products and services could help the economy recover at a faster pace.
This pandemic has cost many countries due to the intricate supply chains and dependence of supplies from China. While there was an interest to look at alternate manufacturing hubs, many countries have started talking openly about `not made in China', the businesses in India can benefit from this coming wave of manufacturing and supply chains relocation, and to achieve all the above, we need an exceptionally large countrywide, efficient, and scalable logistics solutions supporting JIT (just in time) and always-on networks.
More than 60 percent of the total freight transport in the country is on road, and the industry is extremely fragmented with 85 percent vehicle ownership is with individuals owning less than five trucks. This segment is vital to connect entire Bharat. There needs to be numerous innovations in business and technology which are country specific with Global Standards, as the solutions for Bharat could be applicable around the world.
According to infrastructure, status to logistics is certainly a good move and putting the National Logistics Policy in place is a crucial need of the hour. To achieve high standards, efficiency, lower cost per unit and creating a new economy, a wholesome approach needs to be taken covering the following
Innovation Funding: Creating a Logistics Innovation Fund of Rs. 10,000 crores with a 5-year life and providing funding on equity and debit modes to support Logistics Innovations in
1.Business Models Market places, aggregation of resources, cross dock to provide a conduit to Inter & Intracity, Facilities and Reverse logistics.
2.Technology Automation, efficient fleet design, telematics, data analytics, renewables and cold chain.
Energy Policy Energy Index, Fossil Fuel, Renewables Adaption
1.Energy policy aiming at efficiency increase across the whole supply chain could provide self-sustenance and huge security to the country. Creating an Energy Index for products and processes, along with self-audit by businesses will create a global pioneering economy and reduce the dependence on oil imports, saving valuable Forex.
2.The renewable adaption in logistics has been extremely low and can be increased with relevant support through longer-term incentive and funding for innovation like adopting zero-emission technologies such as EV in intracity transport and fuel cell-based vehicle for Long haul, and solar installations at Big Boxes, i.e. warehouses, stock points, retail spaces and others.
Unified Taxation & Policy
1.Fuel One of the major cost of logistics, and would recommend a nation-wide normalized taxation, i.e. to bring fuels into GST
2.Creating a unified policy & taxation across the country in certification, registration and monitoring of assets in logistics like vehicles and machinery
3.Multimodal transport through private and public participation with a clear policy framework.
Technology Integration & Standards Update
1.Technology integration would create highly reliable logistic networks, reducing transit times, increase transparency and improving service levels significantly, like the digital documentation will increase
2.Widely branching out ARAI testing and approvals on time-bound basis
3.Regional specific mapping with Navic and IoT and other sensor integrations should be standard across the logistics.
A.Safety and security
1.Safe and Secure transport and logistics will increase the reliability and confidence to increase the business. Council to study the integrated support with Security agencies like Highway patrol, State and central police.
Skill Mapping, Training & Improvement
1.The skill mapping of resources human and physical is crucial for policy decisions and iterations for CI/CD mechanism. Next to farming, highest manpower engaged is in logistics. Policies need to be simplified and user friendly.
2.Re-Skilling and upskilling are important, and logistics institutions, colleges, and training institutes are to be widely started. Training and skillset improvement for drivers, technicians, warehouse and support staff.
1.Permitting EV charging hubs like petrol pumps, either solar-based or routine fuel-based, on highways with PPP model at strategic locations for reliable recharging facilities with dormitories, vehicle maintenance and repairing & resting places for drivers
With a comprehensive policy created in cooperation with various stakeholders Govt bodies (State and Central govt) and industry participants will drive a clear adaption across the country, to achieve the broad goals of improving India's ranking in LPI (logistics performance index) to 25 or better and the grand vision of India to be a $5 trillion economy.