The infrastructure and operations of a country’s logistics sector are the ideal indicators of its economic status. In recent times, the Indian logistics sector has fit into this definition perfectly. It handled the pandemic disruptions, kept the supply chains running, and also ensured the delivery of vaccines, oxygen cylinders and various other critical supplies to all parts of the country.
We are now witnessing an all-round growth in the sector. There is rapid technology integration taking place in the arena with logistics marketplaces entering the scene. AI, IoT and robotics are turning manual operations smarter at an unprecedented pace. However, to sustain this momentum, and transform the Indian transportation sector into a globally competitive and efficient ecosystem, a lot more needs to be done.
There are various expectations that the upcoming Union Budget 2022 is likely to fulfil. These include the following:
Greater infrastructure allocation
The Government of India has announced ambitious infrastructure projects, some of which are currently being built all over the country. There is the National Infrastructure Pipeline (NIP) that aims to streamline and transform connectivity across the country. However, greater budgetary allocation is needed to expedite the completion of these marquee projects. Also, while there is a lot of attention given to building new expressways, there is not enough improvement in last-mile connectivity and infrastructure across the country. Better state highways and local roads are crucial to reducing travel time and operational costs.
With e-commerce and internet access, rural India too is becoming aware of technological development happening PAN-India. The time has come when the government needs to not only focus on building highways that connect metro or Tier 1 and Tier 2 cities, but also place emphasis on establishing connectivity between Tier 3, Tier 4 and smaller rural townships.
By creating better roads and warehousing clusters in the hinterland, a lot of economic potential can be unlocked whilst building employment opportunities. For instance, there could be one common logistics hub for every 100 km radius or so, and through superior last-mile connectivity, faster 1-2 days deliveries can be made across the regions covered by such hubs.
The government has already launched initiatives such as Bharatmala, Sagarmala and is also developing multi-modal logistics parks. With the allocation of a sizable budget to the development of such warehousing and logistics clusters, faster growth can be achieved. The manufacturing sector will also get convenient market access allowing them to enhance consumer experience.
Digitization of logistics
Technology will play a pivotal role in the Indian logistics sector for the years to come. The government needs to spend on digital transformation of services to ensure greater speed. For instance, the queues at toll plazas have been reduced with the integration of FASTag, which has eliminated the need for manual intervention. Similarly, a lot of time and effort is spent in generating and carrying around various documents such as hard copies of invoices and e-way bills. By digitizing these things, movement of goods can be made faster, more convenient, and transparent. This must be urgently addressed.
Reducing logistics costs
India spends nearly 14 percent of its GDP on logistics whereas most developed countries have kept it well below 10 percent. The government must take budgetary steps to ensure that the logistics costs are brought down as much as possible.
Inland waterways
With roughly 14,500 km of navigable waterways, India has incredible potential for developing a faster, better and more efficient support system for road networks, which are currently overburdened. By developing these waterways and providing adequate warehousing and road connectivity to the hubs on these routes, the logistics costs can be optimized. It is hoped that the government allocates sufficient funding for the development of these inland waterways.
Enhancing ease of business
Despite the intent, there is still a lot of red tape culture prevalent in India. This is where we hope the government will revise rules and policies to ensure that there is a greater ease of doing business, and investments in the logistics sector are generous.
The pace of infrastructure development at present is stellar and probably faster than any other time in the history of independent India. However, for us to achieve the $5 trillion mark and become the world’s third-largest economy by 2030, the journey must start right now through superior budgetary allocations and addressing of the logistics sector challenges through the Union Budget 2022.
(The writer is CEO and Co-Founder, Vahak-online transport marketplace)
