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India’s logistics cost will come down to single-digit within the next five years, to less than 9 per cent, Union Road Transport and Highways Minister Nitin Gadkari said on Thursday.
Addressing the ‘Deloitte Government Summit’, the Minister said construction of several highways and express-ways along key connectivity routes, coupled with usage of alternative fuels, will help reduce logistics cost.
“I am confident that within five years our logistics cost will be in single-digit,” he said.
Gadkari claimed logistics cost in India were around 14 – 16 per centof GDP, while in contrast, in China these were at 8 per cent and in Europe it was around 12 per cent.
“As logistics cost come down, our prices will be more competitive globally,” he said.
However, as per estimates of the economic think-tank, National Council of Applied Economic Research (NCAER), logistics cost in India ranged from 7.8 per cent to 8.9 per cent of GDP in 2021-22.
Auto Industry Outlook
According to Gadkari, the aim is to take the automobile industry to the top spot, globally. India ranks number three in size, after the US and China.
The country overtook Japan, with the size of the industry rising to ₹22 lakh core last year, from a mere ₹7.5 lakh crore in 2014. Most global majors have a presence here too.
“Australian government told me that they were buying e-buses from us, and adoption of EVs (two wheelers and cars) have already seen a 200 per cent increase in adoption. Over the next five years, there will be a further change in numbers (increased adoption),” he said.
Emission norms for tractors are under-discussion too, Gadkari said.
Rural–centric planning
Gadkari pointed out that planning mechanism in India was mostly urban-centric, specifically concentrating around the four metros of Delhi, Mumbai, Chennai and Kolkata. Such urban-centric planning has led to rural disparities in terms of economic parameters.
“Like smart cities, smart village is also economically viable. And why should we not explore that too,” he said adding that the “urban mentality of governments and organisation is creating a lot of economic disparity (between urban areas and villages).”
The Minister opined that in any organisation, performance audit is more important than the financial audit.
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