National Logistics Policy: Why Should You Care?
“The line between order and disorder lies in logistics” wrote SunTzu, author of the famous book, ‘The Art Of War’. This quote is so relevant even today. PLA at the India-China border is upping its logistics game to brave the winter on a 5,000m high plateau. An often-overlooked part is the impact good logistics can have on a person’s morale to fight it out, be it defense, the Indian economy in general, or local businesses in particular. Logistics, in a nutshell, is organization and control.
The Key Contours
There are four major steps under national logistics policy
Integration of Digital System (IDS): In a way we have taken inspiration from China. 30 different systems of seven different departments (road transport, railway, customs, aviation, foreign trade and commerce ministries). will be integrated digitally. It will improve shorter cargo movement.
Unified Logistics Interface Platform (ULIP): There is a common misconception floating around that it is already made, however, this is not the case. In simple words, this is grand program which will help manufacturers trace the location of their consignment. The information shared will be confidential to the stakeholders involved. For example, which freight trains are available, what is their capacity? In a nutshell it will facilitate smooth cargo movement with information as the backbone.
Ease of Logistics (ELOG): A policy still underway which will make the rules easy for everyone, from complex to easy. This will enhance India’s competitiveness globally, while boosting India’s growth.
System Improvement Group (SIG): Whatever we build may need upgradation in the future. This is what the SIG will take care of.
There are many intricacies in the policy as well, for instance, they want to reduce the container turnaround time from 44 to 26 hours. To achieve this and many more targets we will need massive investment in infrastructure. India plans to spend USD 1.4 trillion on infrastructure via 'National Infrastructure Pipeline' in the next five years. The policies as we can see are in harmony with each other. When the Prime Minister said, “The National Logistics Policy is well-thought and has been made after hard work of eight years.” He knew the cohesiveness of the existing plans. The PM also stated that The PM Gatishakti Plan will be the key pillar of the National Logistics Policy, which adds another feather in its cap.
However, what is often overlooked is the part of the policy which talks about the timeline of implementation. The policy itself has spelt out its timeline, whether it will adhere to it or not is yet to be seen. The government will have to find a way to maneuver through land acquisition policy, and those in the unorganised sector. This will have to be done while the youth is provided adequate training to keep up with the policy norms.
Why did we need a policy now?
“India is losing 14 percent of its GDP to poor logistics”, said Minister of state and commerce, CR Chaudhary at the Global Logistics Summit. Numerically, it boils down to anything between 80 to 90 Bn USD. These are big numbers for any country’s GDP.
If we can pull this polcy off, it will increase India’s global competitiveness while improving its Ease of Doing Business Ranking. The government has already realized this, with its initiatives like Bharatmala, UDAN (Ude Desh Ka Aam Nagrik), and Sagarmala. Nitin Gadkari said Logistics cost in 14 to 16 percent, and must be reduced to 10 percent. This means a deterrence to invite companies to manufacture locally, which does have an impact on the job market in India. It is already 10 percent in China, about 8 percent in European Union, and 8 percent in USA. India is presently at a major disadvantage. They are willing to put in the work to improve their logistics even further. China, for example, has recently unveiled a state-owned logistics behemoth, which will further improve its logistics competitiveness. Also, The World Bank in its recently released Logistics Performance Index has now ranked India at the 35th position among 160 countries. This situation forms the backbone of National Logistics Policy.
It is high time we realise that logistics is not just a national issue, but an individual one as well. The last road trip you went on, the last flight you booked, or the last time you ordered from any e-commerce website, is all due to efficient logistics. If you were paying heavily for travel expenses, or the cost of your e-commerce purchase was out of pocket, there is a very good chance that inefficient logistics was a part of the problem. Since the new logistics policy has come into effect, big players too like Flipkart and Amazon are happy, because ease of transportation means a win-win situation for them. Clearly, it impacts everyone.
