Budget recommendation: The Logistics sector plays a key role in the functioning of almost all sectors of the economy. In line with PM Narendra Modi’s vision to bring down the logistics cost to make our exports competitive, the industry is also expecting some announcements in the Interim Budget 2024 on this front.
Despite our existing infrastructure and targeted initiatives, support is required to further strengthen the logistics ecosystem in the country, industry body PHD Chamber of Commerce said in its pre-budget memorandum. This will save logistics costs and boost efficiency. Simultaneously, India has a rich network of rails, roads, waterways, airways, and warehousing.
Deployment of tech and rail-road connectivity
In a pre-budget memorandum, the industry body PHDCCI recommended the deployment of better technology, including rail-road connectivity, IoT, automation, blockchain, cloud computing, AI, and robotics.
“Efficient supply chains, improved warehouse design, pest control, and inventory management use,” are some of the recommendations made by PHDCCI.
According to PHDCCI, the inter-state transfer of products takes a lengthy time because of complicated regulations, slow clearances, and a lot of paperwork. The fragmentation of the industry and multiple intermediaries in the warehousing ecosystem pose challenges to service providers and customers, leading to increased costs and operational inefficiencies the pre-budget memorandum said.
The industry body believes that the strengthening of the logistics sector is of crucial importance. During the 2021-22 budget, the National Infrastructure Pipeline (NIP) announced expansion to 7,400 projects.
According to their pre-budget wish list, there are challenges such as high cost and inefficiency, the existence of a multi-jurisdictional framework for the developing logistics ecosystem, low penetration of logistic facilities to the interior parts of the nation, lack of availability of proper warehousing, and lack of modern infrastructure of a world-class standard.
The industry body highlighted issues such as redundancy, unorganised warehouse design, poor seasonal demand preparation, inadequate inventory management, ineffective order management, low pricing flexibility, inadequate warehouse layout, poor product labelling, and poor housekeeping, as some of the challenges in front of the logistics sector.
Logistics policy and GatiShakti Master Plan
The National Logistics Policy (NLP), a companion to the PM GatiShakti National Master Plan (NMP), was introduced to promote economic development and the business competitiveness of the nation through an integrated, seamless, effective, dependable, green, sustainable, and cost-effective logistics network by utilising World-class technology, procedures, and skilled labour.