Features of National Logistics Policy 2022

One of the important government policies for the improvement of ease of doing business is the framing of the National Logistics Policy 2022. This step is very important from the government’s point of view because it will help in creating a healthy environment for businesses. This topic is important from an exam perspective because questions can be directly asked from government policies.

What are Logistics and their Management :

• Logistics refers to the process of managing the resources that are acquired, stored, and transported to their final destination.
  
• Logistics management includes identifying potential distributors and suppliers and determining their effectiveness and accessibility.
  
• The goal of logistics management is to get the right amount of resources or inputs at the right time, to the right place in the right condition, and to the right internal or external customer. For example, in the natural gas industry, logistics includes managing the pipelines, trucks, storage facilities, and distribution centers that process oil that is converted along the supply chain.  
  
• Efficient supply chains and effective logistics procedures are essential to reduce costs and maintain and improve efficiency. Logistics efficiency is a function of infrastructure, services (digital systems/processes/regulatory frameworks), and human resources.
  
• Poor logistics result in late deliveries, failure to meet customer needs, and ultimately business problems. Each one of the supplier chains has had to improve its logistics processes to meet the demand for faster and more convenient delivery of a wider variety of goods. 
  
• One of the reasons why major online retailers like Amazon dominate the retail industry is the overall innovation and efficiency of logistics across all links of the supply chain.  
  
• Logistics management is an important part of supply chain management (SCM). Although these terms are sometimes used interchangeably, logistics focuses on moving products and materials as efficiently as possible. In contrast, SCM covers a much broader range of supply chain planning (SCP) activities such as MRP, Sales & Operations Planning (S&OP), and Supply Chain Execution (SCE), including strategic procurement and transportation management.
  

Government Strategy to Reduce Logistics Cost :

Since 2014, when the Modi government took office, there has been a focus on improving logistics through initiatives such as :

• Sagarmala for shipping
  
• Bharatmala on the street
  
•  UDAN for Aviation
  
• FASTag for electronic toll collection
  
• Prime Minister Gati Shakti – National Master Plan for Multimodal Connectivity, launched in October 2021, basically includes 16 infrastructures including railways and roads for the integrated planning and coordinated implementation of infrastructure connectivity projects.   A digital platform that brings ministries together. Prime Minister Gati shakti will provide information to the public and business community regarding upcoming connectivity projects, other business centers, industrial areas, and surrounding areas.   This allows investors to plan their businesses in the right places, increasing synergies.
  
• Economic zones such as textile clusters, pharmaceutical clusters, defence corridors, electronics parks, industrial corridors, fisheries clusters, and agricultural zones will be covered to improve connectivity and enhance the competitiveness of Indian companies.

The Main Aim of the National Logistics Policy 2022 :

• PM Gati Shakti’s program envisages streamlining services such as processes, digital systems, and regulatory frameworks.
  
• The National Logistics Policy, launched on September 17th, is the logical next step in providing a comprehensive agenda for developing the entire logistics ecosystem in his two grand visions.   Therefore, National Logistics Policy and GatiShakti act as dual engines for logistics.
  
• The vision of the National Logistics Policy is to develop technologically enabled, integrated, cost-effective, and sustainable inclusive growth.
  
• The first goal of the national logistics policy is to reduce India’s logistics costs by 5% of GDP over the next five years.
  
• Second, India’s ranking in the Logistics Performance Index will improve. We aim to be among the top 25 countries in the index ranking by 2030.
  
• It aims to create a data-driven decision-support mechanism for an efficient logistics ecosystem.
  
• It also aims to improve the competitiveness of the logistics sector through a unified policy environment and integrated institutional mechanisms.
  
• This policy aims to minimize logistical problems, multiply exports, and ensure that small industries and the people who work in them benefit greatly.
  
• The policy aims to pave the way for India to become a logistics hub by providing seamlessly integrated multiple transport modes utilizing technology, processes, and a skilled workforce. 

Main Features of the policy :

• Integration of the digital system “IDS”: 30 different systems from 7 departments are integrated, including data in the areas of road traffic, rail, customs, aviation, and trade.
  
• Unified Logistics Interface Platform (ULIP): It brings together all digital services relevant to the transport sector in one portal.
  
• Ease of Logistics Service (ELOG): This is a new digital platform launched by industry groups to solve problems by reaching out to governments.
  
• Systems Improvement Group (SIG): It advises governments on changes to existing laws and processes to improve domestic freight movements. The SIG also submits reports and recommendations to relevant ministries proposing areas for intervention.
  
• Comprehensive Logistics Action Plan: 
  This policy is implemented through the Comprehensive Logistics Action Plan (CLAP). The interventions proposed under the CLAP are grouped into eight main action areas.
  (i) Comprehensive digital logistics system
  (ii) standardization of physical assets and benchmarking of service quality standards;
  (iii) Human resource development and ability development in logistics
  (iv) Government involvement
  (v) EXIM Logistics
  (vi) framework for service improvement;
  (vii) Sectoral Plan for Efficient Logistics
  (viii) Promote the development of logistics parks.

Major Implications :

• The reaction from stakeholders has been positive. For the first time, the $200 billion logistics sector has taken center stage.
  
• This directive is an example of interagency cooperation and contributes to supply chain integration.
  
• The Unified Logistics Interface Platform improves customer visibility and enables logistics companies to implement digitalization at scale. More importantly, the policy will boost investment across the logistics sector.