Government must reduce rail freight tariff structures on select pilot routes, introduce one nation, one permit, one tax system and incentivise trucking industry besides introducing a new institutional framework in order to improve India’s logistics sector which in turn will help improve the ease of doing business in the country, a high-level committee said on Tuesday.
Bibek Debroy-led Logistics Development Committee has suggested creation of an independent logistics department within commerce ministry entrusted with the responsibility to develop a national logistics plan with a long term perspective (five to 10 year) and yearly operational plans with constant review and monitoring.
Comprehensive recommendations are a part of the committee’s report submitted to Prime Minister Narendra Modi on a roadmap to make India one of the most efficient and effective places for doing trade in a time bound manner. The committee has laid out an action plan for all related ministries with time-lines for better monitoring the progress.
Outlining a twin-pronged strategy to give a boost to India’s logistic sector, the committee has suggested policy changes at the border as well as behind the border of trade to fasten movement of cargo in the country.
“Rail freight tariff structure (both slabs and absolute tariff rates) be reduced and rationalised at least on select pilot routes like Delhi-JNPT, Delhi-Mundra, etc and facilitate running of time-tabled freight trains for some select pilot rain routes to provide trade superior rail transport services and arrest the fall in its freight modal mix,” the committee has said.
Outlining the need for supporting the truck industry, the committee has suggested that government amend the existing regulations to make road transport experience seamless and efficient and incentivise trucking industry to move towards formal and organised operators. “Introduce the one nation, one permit, one tax system and amend the provisions of the Motor Transport Workers Act to incentivise trucking industry to increase its scale and size,” the committee said.
Highlighting the challenges pertaining to trade facilitation at the border, the committee has suggested to do away with physical examination, to be resorted only in exceptional cases, and shift towards fully facilitated ‘trust-based’ clearance process. “Create a fully automated paperless trade environment, set up a single window digital portal integrating all stakeholders and monitor key outputs across all major trade gateways,” it added.
Government has set an ambitious target to realise a quantum jump in doing business and logistics performance index (LPI) ranks within next two-three years. India has slipped from 35th position in 2016 to 44th position in the World Bank Logistics Index released in 2018.
The LPI is the weighted average of the country score in six dimensions like efficiency of clearance process, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments and timeliness of shipments in reaching destination.