A National Logistics Policy will be released soon and it will clarify the roles of the Union Government, state governments and key regulators, said Finance Minister Nirmala Sitharaman while presenting the Union Budget 2020-21 in the Parliament. The policy will create a single window e-logistics market and focus on generation of employment, skills and make MSMEs competitive.
India’s logistics sector is highly defragmented and the aim is to reduce the logistics cost from the present 14 per cent of GDP to less than 10 per cent by 2022. India’s logistics sector is complex with more than 20 government agencies, 40 PGAs, 37 export promotion councils, 500 certifications, 10,000 commodities and a 160 billion market size. It also involves a 12 million employment base, 200 shipping agencies, 36 logistics services, 129 ICDs, 168 CFSs, 50 IT ecosystems and banks and insurance agencies. Further, 81 authorities and 500 certificates are required for EXIM.
The National Logistics Policy will improve India’s trade competitiveness, create more jobs, improve India’s performance in global rankings and pave the way for India to become a logistics hub.
The following announcements in the Budget Speech will make the National Logistics Policy more robust, said a PIB release:
- GST has brought in efficiency in the logistics and transportation sector. It has reduced turnaround time of trucks by over 20 per cent.
- Geo-tagging of all warehousing.
- Warehousing will be promoted to comply with WDRA norms.
- VGF will be provided for setting up warehousing at the block/taluk levels on PPP mode.
- The Village Storage Scheme through women’s self-help groups will provide backward linkages for seeds, thereby reducing logistics costs.
- Financial assistance under MUDRA loans and NABARD will be provided for this purpose.
- Cold chains for fish and perishables will be promoted.
- Refrigerated vans will be attached to passenger trains to promote quick movement of perishables.
- Krishi trains will also run on PPP mode.
- The Krishi Udan scheme will be promoted/launched whereby horticulture and perishable commodities will be transported through the air route – this will especially benefit the Northeast and tribal areas. It will help the movement of perishables and foodstuff from areas of produce to areas of consumption.
- A cluster approach will be adopted to promote horticulture. ‘One Product One District’ will be encouraged.
- A national organic e-market will be developed for organic products.
- Financing of negotiable warehousing receipts will be encouraged as will be integration with e-NAM.
- A Rs.100 trillion National Infrastructure Pipeline has been launched, which includes over 6,500 infra projects. NIP has projects worth Rs.19.6 trillion for roads, Rs.13.69 trillion for railways, Rs.1.43 trillion for airports and Rs.1.01 trillion for ports.
- Accelerated development of highways will be undertaken, including 2,500 km of access-controlled highways, 9,000 km of economic corridors, 2,000 km of coastal and land-port roads and 2,000 km of strategic highways.
- The Delhi-Mumbai and Chennai-Bengaluru express highways will be operational by 2023.
- Twelve lots of highway building consisting of over 6,000 km will be offered for monetisation by 2024.
- A governance structure for corporatisation of one major port will be introduced.
- Inland waterways, especially Jal Vikas Marg, will be made operational. Inland waterways from Dhubri to Sadia in Assam will be promoted by 2022. Inland waterways will be promoted under a programme called Arth-Ganga.
- One hundred more airports will be established under the UDAN scheme and 1,200 airplanes will be added from the present 600.
- An amount of Rs.1.7 trillion has been allocated for the transportation sector in 2020-21.