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Sunday, September 26, 2021

National Logistics Policy Can Provide a Major Boost to the Sector

National Logistics Policy proposed by the Government of India to enhance the logistic sector of India. As per the Press Information Bureau, the main vision of the National Logistics Policy is to enhance economic growth along with the business competitiveness of India through a sustainable, green, reliable, efficient, seamless, cost-effective and integrated logistic network that will leverage skilled manpower, processes and class technology of the logistic sector. According to the information provided by the Minister of Commerce and Industry, it has been analysed that there is no authorised estimation for the logistic costs; however, few private institutions have assessed that the logistic costs are about 13% to 14% of the GDP. And the proposed National Logistics Policy aims to decrease this cost from 9% to 10%. Though, all this information and proposal of the policy had been provided by the Indian Government in 2019. After waiting for more than two years, now in 2021, there is an update regarding the policy to become officially applicable for the logistic industry of India. Still, the National Logistic Policy has not been officially levied due to the lack of formal inputs from further ministries like shipping and road transport.

A Progress towards Annual Growth             

The ministries have decided to take some more time regarding the assessment of the proposal as well as conducting technical reviews associated with the differences about who will be authorised to conduct key schemes, and this has slowed the official approvement of the National Logistics Policy. As per the information of the Industry Estimates, in 2017, after achieving the status of ‘infrastructure’ the logistic industry of India is now fastened its pace upwards by $160 billion and 10.5% of annual growth. Before deciding on the proposal of the National Logistics Policy, for several decades Indian Government did not prioritise the factor that the logistic sector of India requires a uniform approach for better development. The advisor of the proposed policy, the senior expert of transport policy stated that previously there were several facets associated with logistics and the required policies of these facets have been levied by various bodies. These bodies range from commercial vehicle taxes, cargo containers standardisation, freight charges fixing, new highways planning, toll collections, up to traffic rules. Now the Indian Government has decided to solely provide its focus on highway construction and infrastructure creation with a separate logistics division. And with this initiative thinking towards the logistics sector, the Indian Government decided in 2019 to upgrade this logistic division into a completely separate department.

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A Catalyst for Indian Economy

Apart from all the variables which have been causing the delay in the official approval of the National Logistics Policy, it has been quite evident that after imposing this policy, the logistics sector of India would get a huge boost in many ways. It will offer seamless export and import procedures of goods and services all over the country. Special Secretary of Logistics department, Pawan Kumar Agarwal has stated that a comprehensive organised framework has been developed just to ensure that the policy would be able to achieve the main targeted goals for the logistics sector in India. It would widely enhance the supply chain network of the Indian market. Top supply chain companies in India would be the ones who will get the most benefits from the National Logistics Policy. Some of the top supply chain companies in India are Adani Logistics Company, Future Supply Chain Solutions Ltd, Gateway Distriparks Limited, TCI Express Ltd, VRL Logistics Ltd, and Mahindra Logistics Ltd among others. Along with providing a wide range of benefits for these supply chain companies in India; the National Logistics Policy would also provide a huge boost to the economic growth of India.

Dreadful Impact of the COVID-19 on GDP & Logistics Sector

Due to the pandemic, many development procedures in the industry have been stopped and the GDP dropped drastically. Currently, the logistics sector of India costs amount to an astounding 14% of the GDP which is approximately US$400 billion, compared to the average 8% of the global GDP. And from this, it can be identified that there is a competitive gap present which is near about US$ 180 billion. To increase this competitive advantage for the Indian economic growth and the better development of the logistics industry, the Indian Government has decided to formally levy the National Logistic Policy in 2021. The Special Secretary of the Logistics department, Pawan Kumar Agarwal has mentioned that consultation regarding the proposed policy is over. Now it just requires approval from the Union Cabinet. So, there is a high chance that the logistics sector of India would be able to gain all the benefits of the National Logistics Policy. Ministry of commerce & industry (MoCI) also announced that before formally levied the National Logistics Policy, there will be an annual Logistics Ease Across Different States (LEADS) survey. The main aim of this survey is to analyse the ranking UTs and states in the context of analysing their capability to enable logistics before the official launching of the policy.

Additionally, to simplify the process of launching the policy for imports and export through digitalisation, CBIC, Depart of Revenue has also taken several initiatives such as 24×7 Customs Clearance; SWIFT (Single Window Interface For Trade); Digital Signature Adoption; Import Data Processing and Management System (IDPMS); E-Sanchit and few others. The Government and Ministries are completely prepared and the procedure of launching the National Logistics Policy has been finalised. All the last stage operations have been going on right now. Very soon the logistics sector and top supply chain companies in India would be able to fully accustomed to the exact benefits along with rules and regulations of the new National Logistics Policy.

Also Read: The Serum Institute of India buys Policy Bazaar IPO

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Josie Patra
Josie Patra is a veteran writer with 21 years of experience. She comes with multiple degrees in literature, computer applications, multimedia design, and management. She delves into a plethora of niches and offers expert guidance on finances, stock market, budgeting, marketing strategies, and such other domains. Josie has also authored books on management, productivity, and digital marketing strategies.

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