Daily Current Affairs : 18- December-2023
In the fiscal year 2021-22, logistics costs in India ranged between 7.8% and 8.9% of the GDP, witnessing a decline from 8.7-9.9% in 2011-12, as reported by the National Council of Applied Economic Research (NCAER) and the Department for Promotion of Industry and Internal Trade (DPIIT). This essay explores the reasons behind this reduction and delves into the status and benefits of the logistics sector in India.
Reasons for Reduction:
The report, ‘Logistic Cost in India: Assessment and Long-term Framework,’ attributes the decrease to two key factors:
- Faster growth in nominal GDP compared to logistics costs
- Decline in fuel prices from 2014-15 to 2016-17
About Logistics:
What is Logistics?
Logistics involves the management and coordination of the flow of goods, services, and information from the point of origin to the point of consumption. It encompasses activities such as transportation, storage, handling, and distribution to ensure the efficient movement of products within the supply chain.
Status:
- India ranks 38 out of 139 countries in the World Bank’s Logistics Performance Index 2023.
- Gujarat leads the Logistics Ease Across Different States (LEADS) 2021 index.
- Over 90% of the logistics sector is unorganized.
- Five states contribute to 70% of exports, leading to income and job disparities.
Benefits:
Logistics enhancement:
- Enhances trade competitiveness
- Improves supply chain efficiency
- Promotes Foreign Direct Investment (FDI)
Government Initiatives:
The Indian government has implemented various measures to boost the logistics sector, including:
- Creation of the logistics division in the Commerce Ministry
- Logistics Efficiency Enhancement Program and Vehicle Fleet Modernization Program
- Gati Shakti Scheme, Bharatmala Program, Sagarmala Project, Railways: Freight corridors, e-Air WayBill, and e-Cargo
- National Logistics Policy 2022: Focuses on EXIM logistics and logistics park development
- Land Port Management System (LPMS): Digitizes operations at Integrated Check Posts (ICPs)
- National Logistics Portal (Marine): Provides a single-window platform
- FASTag-based electronic toll collection
Important Points:
The logistics costs in India for the fiscal year 2021-22 ranged between 7.8% and 8.9% of the GDP, showing a decline from 8.7-9.9% in 2011-12, according to a report by the National Council of Applied Economic Research (NCAER) and the Department for Promotion of Industry and Internal Trade (DPIIT) (under Commerce Ministry). This reduction can be attributed to increased efficiency in supply chain management and the implementation of strategic policies aimed at optimizing transportation and distribution networks.
MCQs about Enhancing Logistics Cost in India
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What contributed to the decline in logistics costs in India during the fiscal year 2021-22?
A. Decrease in nominal GDP
B. Increase in fuel prices
C. Faster growth in nominal GDP and decline in fuel prices
D. Unchanged economic factors
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According to the World Bank’s Logistics Performance Index 2023, what is India’s rank among 139 countries?
A. 38th
B. 44th
C. 139th
D. 72nd
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What is the primary focus of the National Logistics Policy 2022 in India?
A. Agricultural development
B. Export and import logistics improvement
C. Industrial automation
D. Healthcare infrastructure
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Which state topped the Logistics Ease Across Different States (LEADS) 2021 index in India?
A. Maharashtra
B. Tamil Nadu
C. Gujarat
D. Telangana
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