Demands for Industry Status to supply chain & logistics in budget

29 Jun '09

6 min read

Safexpress, the 'Knowledge Leader' and the 'Market Leader' in Supply Chain & Logistics has proposed to the Indian Government for providing an 'Industry Status' to Supply Chain & Logistics Sector in India.

Supply Chain & Logistics Sector has today grown to USD 100 Billion and forms the backbone of Indian Economy. This Sector contributes immensely in the growth and development of the Indian economy. Today, when our economy is undergoing downturn, Supply Chain & Logistics Sector has a pivotal role to play in the swift bouncing back of our economy.

India spends 13 percent of its Gross Domestic Product (GDP) on Supply Chain & Logistics as opposed to the usual practice of 10 percent by other developing nations. The Indian economy is striving for improvements in the field of Supply Chain Management & Logistics to gain a competitive edge in today's globalised economy. The Indian Government must enhance its focus towards the growth of the Supply Chain & Logistics Sector in India by taking some concrete measures.

Discussing about the key challenges faced by the Indian Supply Chain & Logistics Sector, Mr. Vineet Kanaujia, GM-Marketing, Safexpress expressed his views by saying, “Inefficient Infrastructure could be the single most critical issue India faces today. Despite impressive economic growth, India's dilapidated roads, congested ports, inadequate power and complex state regulations are impeding development in the Supply Chain & Logistics Sector.”

He further added “National Highways form only 2 percent of the entire Road Network in India, but handle over 40 per cent of the national road freight traffic, putting tremendous pressure on the highway infrastructure as well as resulting in severe traffic bottlenecks. On an average a commercial vehicle in India runs at a speed of 20 miles per hour (mph) compared to over 60 mph in the developed markets of USA and Western Europe.”

He added, “The present pace of Road Infrastructure development in India is slow vis-à-vis other developing economies. The quality of roads in comparison with China is well below expectations and our poor hinterland connectivity is affecting the trade growth in our country.”

Mr. Kanaujia further emphasized on the development of Road Infrastructure by saying “High transactions costs arising from inadequate and inefficient infrastructure can prevent the economy from realizing its full growth potential irrespective of the progress on other fronts. The sooner our Government takes some concrete steps to improve this situation, the better it would be.”

Talking about his expectations from the Indian Government in the upcoming budget, Mr. Kanaujia added “Efficient Infrastructure is the key to the growth of the Supply Chain & Logistics Sector in India. We would request the government to increase its thrust on Infrastructure Development and to take initiatives for faster development of roads. The Budget for 2009-10 must encourage Private and FDI inflows into Infrastructure and must ease regulatory hurdles in order to facilitate building up of world-class infrastructure.”

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