Opinion: Making India sprint like a Cheetah

Article Written By: Piyush Goyal The Modi government is taking landmark steps to fulfill the dream of making India a prosperous, developed country in 25 years. The target to totally transform the country with rapid, equitable growth is achievable, and will be achieved.

The transformation actually began eight years ago with fundamental changes in governance that has significantly empowered and entitled the common man, and brought global spotlight on India as the trusted partner with which every country eagerly wants to engage.

The latest step to accelerate India’s rise to glory is the New Logistics Policy. Logistics is about 5 ‘R’s. Getting the Right product, in the Right condition, at the Right place, at the Right time, to the Right customer.

The new policy gets the ‘R’s right, which will help the small farmer, MSMEs, large factories and the common man. lt will lubricate and rev up the engine of the economy in a manner that creates crores of jobs, eliminates disparities between wealthy metropolitan areas and the countryside, speed up movement of goods and people, and create massive savings from efficiency gains.

The policy will reduce logistics costs from an estimated 13-14% of GDP to single-digit levels. The savings are enormous. A five percentage-point saving in a $3 trillion economy amounts to efficiency gains of $150 billion, which is equal to the estimated value of India’s entire outsourcing industry.

The biggest gainer from this bounty will be small farmers and numerous MSMEs as transportation cost is a much heavier burden on low-value goods compared to precious consignments like gems and jewellery, which can be profitable even if transported by air.

Traditionally, small farmers have often sold fruits and vegetables at heartbreakingly low prices as perishable commodities need to reach the buyer before they start rotting. With better logistics, these commodities can travel longer and faster, therefore much further and to new markets.

Better logistics will significantly improve supply and reduce costs. This means that in the journey of agricultural produce from the farm to the fork, the economics can change in a delightful manner in which farmers get more money and the buyer gets cheaper food. The same is true, in varying degrees, for the entire shopping basket of every consumer because logistics cost is an important component in the price of everything that is produced, manufactured or constructed.

The New Logistics policy dovetails with other major initiatives of the Modi government, particularly the PM Gatishakti, the game-changing initiative that galvanizes infrastructure building from planning to execution with digitally enabled systems that break silos and provide a wealth of data and multiple layers of information. This gives infrastructure project planners and executers vital information about forest land, defence land, power lines and data on several other issues well in advance, so that they don’t come up an unpleasant surprise that delays projects.

PM Gatishakti and the New Logistics Policy also exemplify PM Modi’s whole-of-the-government approach that gets rid of silos in governance.

These policies, along with initiatives such as building high-quality rural roads and expressways, improving container turnaround time, faster and safer railways and dedicated freight corridors, will ensure world-class infrastructure with world-class digital backbones to provide high-quality service – like in developed countries -- to producers, distributers and retail customers.

These policies support major initiatives to produce high-quality products, significantly increase exports, increase business engagement with the world, become a global manufacturing hub and have a much bigger role in global supply chains. All these initiatives need efficient logistics.

It is important to note that global trade and exports have been key instruments of rapid economic growth and job creation in countries that have become prosperous. India has adopted the strategy of using trade agreements to open up developed markets for labour-intensive sectors such as gems and jewellery, leather and handicrafts.

Exporters have a lot of gain from better logistics as their goods will become more competitive and can be delivered to buyers in a faster and predictable manner.

As Prime Minister Modi observed, exporters have to compile shipping bill numbers, railway consignment numbers, E-way bill numbers etc to track and trace goods. They also face multiple authorities. To help them, the Unified Logistics Interface Platform has been launched. Further, a digital platform named Ease of Logistics Services, or eLOGS, under the logistics policy will help resolve any issue they face.

Logistics in India has already improved significantly in the eight game-changing years of the Modi government. The country could move medicines, oxygen and food in the peak of the Covid pandemic. Visionary initiatives like Digital India helped India adapt seamlessly to the work-from-home requirement during the peak of the pandemic.

Infrastructure and logistics are now poised for the quantum leap needed to make India a developed country. Of course, policy alone can’t do the job, but as the PM observed “Progress = Policy + Performance”.

The new policy was announced the day the cheetahs returned to the soil of India. The arrival of fastest animal on earth had a message for transportation. “I expect you to transport goods at the speed of a cheetah,” the PM said to emphasize his message for logistics. Going by his commendable track record and performance, India will certainly race ahead – like a cheetah – to become a developed country.

(The author is Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Govt. of India; and Leader of House in Rajya Sabha.)