The Ministry of Commerce and Industry has recently publicized the Logistics Ease Across Different States (LEADS) Report 2021. This document aims to measure the proficiency of logistics performance across various states and Union Territories of the country. Moreover, it helps in identifying areas of operation where there is scope for improvement, thus enhancing the overall logistics performance.
Understanding LEADS Report
Launched in 2018, the LEADS report grades states based on the quality and capacity of crucial infrastructure like roads, railways, and warehouses. It also keeps in account the operational ease of logistics, including cargo security, terminal service speed, and regulatory approvals.
The structure of the report is established along three dimensions that significantly influence logistics ease: Infrastructure, Services, and the Operating and Regulatory Environment. These three factors are further divided into 17 parameters to provide a detailed examination.
The Need for Efficient Logistics
India’s logistics costs currently account for around 13-14% of the Gross Domestic Product (GDP), compared to just 7-8% in developed countries. The government is aiming for a 5% reduction in these costs over the next five years. The existing logistics costs in India register at approximately 14%, which is substantially higher than the global average of 8-10%.
With efficient logistics being crucial for businesses and citizen empowerment, the government is keen to enhance this area of operation. For instance, during the second wave of Covid-19, logistics played an essential role by distributing necessary supplies, including liquid medical oxygen, throughout the country.
State Rankings
The LEADS 2021 index reveals Gujarat, Haryana, and Punjab as the top performers. This is the third consecutive year that Gujarat has topped the rankings. Among the Union Territories, Delhi secured the top position.
In the North Eastern States and Himalayan Region, Jammu and Kashmir, Sikkim, and Meghalaya topped the rankings, respectively.
Suggestions for Improvement
The report suggests that states should develop a state-level logistics policy and a logistics master plan. It also encourages the implementation of a single-window clearance system for logistics, the establishment of a grievance redressal mechanism, and enabling skilling in logistics through State skilling infrastructure.
Related Initiatives
Several initiatives related to logistics and infrastructure development are underway. These include the PM GatiShakti Master Plan, the Dedicated Freight Corridor (DFC), the Sagarmala program, the Bharatmala Pariyojana, and the E-Way Bill Integration with FASTag, RFID. These initiatives symbolize the government’s commitment to improving the efficiency of logistics and reducing associated costs, aiming to bring India’s logistics costs closer to the global average.