Logistics players can rejoice.
The future of the Indian logistics industry has expanded into a scenery of holistic planning models, multimodal connectivity, decongested traffic nodes, and more warehousing space. When Indian finance minister, Nirmala Sitharaman, weaved through her Union Budget speech on February 1, she mentioned an encouraging development in the Gati Shakti plan introduced by Prime Minister Narendra Modi last year in October.
She indicated that, under the plan, there will be 100 cargo terminals constructed all over the nation’s industrial corridors in the next three years. This development would be key to pushing logistics facilities into new realms of efficiency, as transporters can move and store consignments with greater freedom.
The Agenda of the Gati Shakti Master Plan
The ‘Gati Shakti’ is the national master plan for multimodal connectivity and provides a digital platform for 16 ministries in the nation—including logistics infrastructure, transport, airports, railways, waterways, and roadways.
When each of these concerned ministries work in silo, there is greater risk of infrastructural implementation overlapping instead of coinciding, and the concomitant waste of resources endangers the cost effectiveness of the whole system. Therefore, the Gati Shakti digital platform, boasting geoinformatics capabilities, allows accurate coordination between the ministries as they implement various infrastructures.
Cost Effectiveness: the Last Step to Success
Several studies point to India’s logistics costs reaching 14% of the GDP as opposed to the more efficient 8-9% mark of advanced economies like the U.S. and China, which is why cost effectiveness is one of the foremost problems that needed solutions The current digitization of the logistics industry and its many supply chains will also led to superior management of labor and resources, which would be the last step on the road to logistic success for the biggest democracy on the planet.
68.59% Budget Boost for Central Government’s Roadways Ministry
Under the umbrella of the Gati Shakti plan, also planned for the future are 400 new-age Vande Bharat trains, assigned to the Indian Railways, and 26,000 km of roadways, assigned to the Bharatmala Pariyojana project headed by the Ministry of Road Transport and Highways (MoRTH). The MoRTH was awarded a 68.59% increase in budget for FY 2022-23, with ₹1,99,107.71 crore set aside compared to ₹1,18,101 crore for FY 2021-22.[1]
Still in Phase I, the Bharatmala Paroyojana is a mega-sized umbrella project that will integrate all the roadway infrastructure in the highway networks of the Golden Quadrilateral, North-South, East-West, coastal, and border zones. While delayed, it is expected that these hundreds of economic corridors, feeder routes, bypasses, elevated flyovers, and greenfield expressways will boost the movement of freight traffic for the logistics industry in a big way.
Maharashtra’s Highway Networks Exude Optimism
Also in the works is the Hindu Hrudaysamrat Balasaheb Thackeray Maharashtra Samruddhi Mahamarg, a 701-kilometre greenfield expressway connecting Mumbai to Nagpur, which will link various agricultural and industrial nodes of the state to the two urban hubs.
These nodes have been christened the ‘Krushi Samruddhi Nagar’ by its developer, the Maharashtra State Road Development Corporation, and will consist of 20 towns interspersed at reasonable distances from each other. These towns will provide trade, amenities, and infrastructure, which will speed up the logistics networks in the state of Maharashtra.
The Delhi-Mumbai Industrial Corridor (DMIC) Also Earns Budget Boost
For FY 2022-23, the Union Budget session in Parliament outlayed ₹1,500 crore to the National Industrial Corridor Development and Implementation Trust (NICDIT). The NICDIT would utilize this into developing infrastructure facilities, greenfield and brownfield industrial area, and trunk infrastructure packages at nodes on the Delhi-Mumbai Industrial Corridor (DMIC) and the Chennai-Bengaluru Industrial Corridor (CBIC).
Initially signed as a memorandum of understanding between the nations of India and Japan in 2006, the DMIC is now the biggest logistics infrastructure project in the nation. It also includes a 1483-kilometre Multi-modal High Axle Load Dedicated Freight Corridor (DFC) that passes through the six states of Maharashtra, Gujarat, Rajasthan, Haryana, the National Capital Region, and Uttar Pradesh. Naturally, this would be another massive boost to the logistics network in an economically-rich part of the nation.
As these infrastructural development projects pick up speed, the era of logistics is looking as clear as the roads it will enjoy. India has a long way to go in terms of logistics efficiency, but we are on the right track. clear as the roads it will enjoy. India has a long way to go in terms of logistics efficiency, but we are on the right track.
[1] Union Budget 2022 | Road transport sees 68% hike in allocation, Jagriti Chandra, The Hindu, February 2022. https://www.thehindu.com/business/budget/union-budget-2022-road-transport-sees-68-hike-in-allocation/article38361659.ece
