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The National Logistics Policy is a logical and key step in Modi government’s grandiose plan to make India a developed nation by 2047
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While launching the National Logistics Policy recently, Prime Minister Narendra Modi said something that reinforced how infrastructure development has been a key element of his governance plank for the last two decades. “The National Logistics Policy is not being launched suddenly. It is the culmination of eight years of hard work… If I speak for myself, I can say that it includes my 22 years of governance experience from 2001 to 2022,” he said.
Indeed, infrastructure (from infra expansion, to connectivity – physical and digital to multi-modal transport system) has been integral to his governance plank.
Some of the examples also show how many of the projects being implemented nationally were first conceived when Modi was Gujarat chief minister. For instance, while multi-modal connectivity is essentially in the Centre’s domain, Modi, as Gujarat CM, once organised a global summit on the theme in Ahmedabad.
Infrastructure has also been a highlight of his Independence Day speeches. In his 2021 I-Day speech, he laid down his vision of the PM Gati Shakti plan. The plan was unveiled in October 2021. In his 2022 I-Day speech, he outlined his “Panch Pran” blueprint which also talked about making India a developed nation by 2047. While launching the National Logistics Policy recently, he said it was “another step towards making India a developed nation”.
Government functionaries have often stressed that the National Logistics Policy and Gati Shakti would act as “double engines for logistics.” The policy improves efficiency and productivity and promotes rapid infra expansion and development.
The National Logistics Policy aims to “energise every sector”, while acting “in tandem with, and offering full support to” the PM Gati Shakti National Master Plan. All states and Union territories have now joined the PM Gati Shakti National Master Plan.
Speed And Scale
Whether it is the National Logistics Policy or Gati Shakti, they are driven by “speed and scale” – a phrase that PM Modi often invokes. The PM once said: “The previous governments considered speed a luxury and scale a risk. We have changed this perception.”
Speaking recently, Modi said New India was possible “with bold reforms, big infrastructure and best talent”.
Indeed, infrastructure expansion – both physical as well as digital – is often showcased by the government to argue how good governance is breaking silos and facilitating ease of doing business and ease of living.
Among statistical data which are routinely showcased by government spokespersons are how “in 2014, over 92 per cent of mobile phones used in India were imported, but today, over 97 per cent of mobile phones used in India are made domestically, and India also exports electronic devices worth $2 billion annually”.
Then, prior to 2014, “the country had about 250 km of Metro train track. Today, the network has expanded to 700 km with 1,000 km of new routes being actioned”.
“From 1987 to 2014, a network of 1,500-km-long interstate natural gas pipeline was achieved. Today, in addition to this, a network of 16,000-km-long gas pipeline is in the works. There are 13 functional waterways in India today while the number was five before 2014.There were two mega food parks in the country before 2014. Today, there are 19 mega food parks functioning in the country.”
“India’s defence exports have grown 8 times in the past five years, with Indian defence equipment being exported to over 75 countries.”
“While there were 70 airports before 2014, today the number is 140. In the next one decade or so, India will need 2,000 more passenger and cargo planes. In the same period, the country will add around 400 new Vande Bharat trains.”
Reforms Driving Change
Multiple reforms, whether it is the National Logistics Policy or Gati Shakti, are also designed to make India into a manufacturing hub, it has been argued.
With Gati Shakti, National Infra Pipeline, PLI Scheme, GST, IBC, and now the National Logistics Policy, the government also hopes to add further sheen to its reputation as an investment hub. Last year, India received a record FDI of about $84 billion.
Now, a Gati Shakti university has been approved. Multimodal infrastructure where every means of transport is connected and supported by each other is the basis for urban renewal. Under the Gati Shakti National Master Plan, when a project is conceptualised, its three dimensions are first evaluated.
The National Logistics Policy, which aims to bring all states and various departments together and breaks silos, is touted as the next logical step towards making India a $5 trillion economy by 2025 and a developed nation by 2047.
Some experts who closely follow PM Modi’s governance model liken it to “China’s thrust on infra expansion and its subsequent rise”.
In a 2010 study on “Transport Infrastructure and Economic Growth in China,” Abhijit Banerjee, Esther Duflo and Nancy Qian observed, among other findings: “Transportation may lead to substantial cost savings, but these effects may be mitigated by limits on the mobility of factors such as capital, skill and management within China.”
Unlike China, India is a democracy, but is it constrained by artificial restrictions on free flow of goods and services, people (both skilled and unskilled), ideas and capital/
While the debate will continue, and India’s infra-led growth story will be keenly watched, what is undeniable is that the National Logistics Policy is a landmark towards making India an economic powerhouse.
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