A year after the National Logistics Policy (NLP) was launched by Prime Minister Narendra Modi on September 17, 2022, the central government has managed to streamline most digital processes related to cargo movement across the country.
However, many gaps in infrastructure development, which hinder efficient cargo movement, are yet to be plugged.
Sumita Dawra, Special Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), spoke to Moneycontrol on September 15 on the work done by the government under the NLP over the last year.
"We have integrated data from 17 ministries on the Unified Logistics Interface Platform (ULIP), which allows users to use different APIs (Application Programming Interfaces) to access this data and even make payments through the ULIP platform," Dawra said.
Till now, the Network Planning Group (NPG) has worked with state governments to form their own logistics policies, which will help promote efficient logistics at the state level, she said.
So far, 21 states and one Union Territory have notified their logistics policy, Dawra said.
Projects worth Rs 11 lakh crore evaluated
The special secretary added that after 55 NPG meetings, 107 projects, worth Rs 11 lakh crore, across various ministries have been evaluated. The DPIIT is working with the respective ministries to address the infrastructure gaps identified in these projects.
"The NPG is the institutional mechanism at the central level, where big-ticket infrastructure projects are evaluated and tracked as to whether they are following the principles of Gati Shakti. The aim is to ensure that the infrastructure projects serve the economic and social interests," Dawra said.
In order to quantitatively measure the impact of reforms on logistics, the central government has estimated a total logistics cost for India, working with members of the industry as well as foreign experts. This will be made public by the end of September 2023, she said.
With this, the DPIIT will be able to show a clear year-on-year comparison of how the NLP is helping to reduce logistics costs.
While Dawra highlighted a number of steps that have been taken to ease cargo movement, she said that in order to substantially reduce the country's logistics costs, infrastructure gaps identified across the country need to be addressed.
The DPIIT is working with all central ministries on their individual Sectoral Plans for Efficient Logistics (SPEL) under the NLP, but making these plans and implementing them will take time, she said.
While Dawra did not share the information about which ministries are yet to come out with SPEL, Moneycontrol has learnt that only four have submitted them till June 2023.
- Work done under the National Logistics Policy so far
The central government operationalised ULIP last year.
The ULIP platform now contains data from 17 ministries and government bodies. They include the Ministry of Commerce and Industry, Indian Railways, Ministry of Road Transport and Highways, Ministry of Civil Aviation, National Industrial Corridor Development Corp, Central Board of Indirect Taxes and Customs, Indian Ports Association, Ministry of Consumer Affairs, Food and Public Distribution, Ministry of Ports, Shipping and Waterways, and Ministry of Electronics and Information Technology.
Furthermore, 641 logistics companies have registered on the ULIP platform. Out of these, 106 companies have started using around 57 APIs applications from 112 APIs, as part of the platform trial. In all, 11.8 crore transactions have been tested on the ULIP platform last year.
State Logistics Policy & Logistics Ease Across Different States (LEADS) survey
In the last year, 21 states -- Gujarat, Maharashtra, Assam, Telangana, Uttar Pradesh, Haryana, Kerala, Himachal Pradesh, Andhra Pradesh, Madhya Pradesh, Manipur, Mizoram, Karnataka, Odisha, Tripura, Uttarakhand, Tamil Nadu, Punjab, Chhattisgarh, Jharkhand and Goa have notified their respective State Logistics Policies.
Andaman & Nicobar Island is the only Union Territory to have notified its State Logistics Policy.
These policies promote the development of intermodal infrastructure, improvement in logistics services, processes and regulatory regime, digital systems, and capacity, and also logistics cost.
The government has also conducted the LEADS survey for 2022-23, which will be launched in October.
LEADS is an indigenous data-driven index to assess logistics infrastructure, services, and human resources across all 36 states and UTs. This index is prepared by the Union government after obtaining the views and opinions of the stakeholders in various states and Union Territories and after conducting an online survey on integrated logistics ecosystems in the country.
Gujarat has retained its position in the achiever’s category for the past four surveys since 2018.
Estimated total logistics cost
The government has come up with an estimated total logistics cost for India, which will be made public by the end of September.
The central government has worked with the members of the industry and has taken advice from foreign experts for the methodology.
A task force was formed in March this year when the need was felt to develop a framework for the calculation of logistics costs on a periodic basis.
This 18-member task force has been working under the chairpersonship of Dawra to develop a framework for the calculation of logistics costs in India.
- Unfinished Business
Most Union ministries have not yet created plans to improve their delivery infrastructure as part of the NLP, as they struggle to manage fund and land allocation issues between ministries.
Till June 2023, only four ministries -- the Ministry of Coal, Ministry of Steel, Ministry of Power, and Ministry of Ports, Shipping, and Waterways -- had submitted their SPEL plans.
As part of the NLP, the central government had asked 13 ministries to come up with their SPEL to focus on cross-sectoral integration and logistics efficiency.
The government had said that while infrastructure development plans, such as the National Rail Plan, Bharatmala, and Sagarmala exist, the creation of SPELs was necessary to address logistics issues pertaining to physical and digital infrastructure, processes, policies, and development of human capital. Bharatmala and Sagarmala are programmes to enhance and connect roads and waterways for improved logistics.
Creation of infrastructure for efficient logistics
While a number of infrastructure gaps have been identified under the NLP, work to resolve these gaps is still pending.
So far, under the NLP, 107 bottlenecks at various ports have been identified. They need to be provided with last-mile railway and road connectivity.
These bottlenecks have been divided into three categories, on the basis of the priority with which their infrastructure gaps need to be addressed.
They will require investment of around Rs 7,500 crore and work on these projects is expected to take around 2-3 years from the time of commissioning.
While Union ministries were notified about these bottlenecks in 2022, work on these projects has not started.
"Most larger projects, which have to be developed on priority, will require substantial capital expenditure and cabinet approval, which is a time-consuming process," a senior government official said.
He added that, in the case of smaller projects, state-level departments have been notified and work is expected to start on some projects in the next few months.
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