Vasan wants infrastructure boost to logistics

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Massive investment to build better logistical infrastructure and additional capacity is the need of the hour, said Union shipping minister G.K. Vasan here on Tuesday.

Speaking at the inaugural function of the two-day Logistics Summit 2012 organised by CII, Mr Vasan said India lacks sufficient logistics infrastructure.

“The installed logistics infrastructure is inadequate to handle the impact of increased economic activities in the country. The pressure is mounting,” he said. He added that the logistics infrastructure in the country needs speedy augmentation in terms of both quality and capacity through
adequate investment not only from the government but also from the private sector.

The pace at which infrastructure development has happened to the growth in freight traffic has been rather slow, thereby acting as a bottleneck and dragging growth, he said, adding that the country should hasten the pace. He said a well-developed logistics infrastructure with efficient processes will result in significant savings in terms of service levels, transit times, inventory costs, processing time and thus overall logistics costs.

“As per a World Bank survey, we have slipped in our Logistics Performance Index (LPI) and it reflects some weaknesses in our logistic system. Logistics cost in India is high at 13 per cent to 14 per cent of GDP compared to 7 per cent and 8 per cent in developed countries,” he added.

In order to improve LPI, Mr Vasan said the government has brought policy reforms besides investing in building infrastructure across rails, roads, airports, ports, logistic parks, containers, inland container depots, container freight stations, warehouses and cold chains.

He said the shipping ministry has been vigorously implementing the national maritime development programme and in the current 12th plan, it has envisaged to increase port capacity to 2686.66 million metric tonne per annum by 2016-17.