PM unveils National Logistics Policy
- Category
Economy
- Published
23rd Sep, 2022
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Context
The Prime Minister unveiled the National Logistics Policy that seeks to address challenges facing the transport sector and bring down the logistics cost for businesses from 13-14% to a single digit.
- The policy was announced for the first time in the Union Budget 2020.
Key-features
About India’s logistics sector
- India’s current logistics cost as a proportion of the GDP is some 13-14 per cent.
- The sector’s present market size is 160 billion USD.
- Its improvement can ensure a 10 per cent decrease in indirect logistics cost and increase the growth of exports by 5 to 8 per cent.
- India’s logistics sector provides jobs for more than 22 million people.
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- The draft policy provides for the government creating a single point of reference for all logistics and trade facilitation matters, reducing costs for the logistics sector to 10 per cent in five years.
- Its focus areas are Integration of Digital System (IDS), Unified Logistics Interface Platform (ULIP), Ease of Logistics (ELOG) and System Improvement Group (SIG).
- The IDS will integrate 30 different systems of seven different departments, such as customs, aviation, road transport, railways, international trade and commerce ministries.
- The ULIP aims to ensure continuous monitoring of cargo movement.
- The ELOG would seek to simplify procedures and achieve ease of doing business.
- The SIG would monitor all projects related to logistics on a regular basis and ensure the removal of hurdles faced in the sector.
- An empowered group of secretaries (EGoS) has been constituted under the PM Gati Shakti to monitor and review the implementation of the NLP.
- The policy is an endeavour to improve the competitiveness of Indian goods, enhancing economic growth and increasing employment opportunities.
Logistics demystified:
Logistics encompasses planning, coordinating, storing, and moving resources —people, raw materials, inventory, equipment, etc., from one location to another, from the production points to consumption, distribution, or other production points.
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About
Aims and Objectives
The National Logistics Policy aims to:
- Promote smooth movement of goods across India
- boost competitiveness of the Indian goods in the domestic and international markets
- bring down the logistics cost, which in turn would improve efficiency of various sectors of the economy, boosting value addition and economic growth
How government is strengthening the logistics sector?
- The government is using technology to strengthen the logistics sector.
- Faceless assessment has started in customs and e-way bills and FASTag are bringing efficiency in the logistics sector.
- Sagarmala project to connect ports and dedicated freight corridors have started to improve logistics connectivity and systematic infrastructure development work.
- Budgetary Allocation - Government allocated Rs 5.54 trillion towards capital expenditure across various ministries in the Union Budget 2021-22, a 34.5% jump from the previous year.
- Mission Gati-Shakti – The mission has been launched as a national master plan for multi-modal connectivity.
- This will bring nearly 16 different ministries and departments of the government together to promote coordinated planning and execution of projects.
- This will aid in development of an integrated logistics and transport policy providing end-to-end connectivity.
- Bharatmala Pariyojana - 34,000 km of road infrastructure works would be undertaken, of which, 11,000 km have been targeted to be completed by March 2022.
- Eastern and Western Dedicated Freight Corridors - Commissioning of such corridors can be a game-changer for boosting railway freight share.
- It will not only decongest the existing rail network but would allow for longer rakes to carry higher loads at an average speed of nearly 70 km/hr.
- The National Air Cargo Policy has also been formulated that seeks to build air transport shipment hubs in all major airports by 2025.