NEW DELHI: Union Minister of Commerce and Industry Suresh Prabhu recently said that Government decided to house the new logistic entity in his Ministry, and how digitalisation will be the key strategy.
Speaking on the rationale behind creating a new logistics division, he said that there was a need to deal with logistics as a separate subject in the Government of India. What we lacked earlier was a dedicated team dealing only with logistics. Every activity, we all know, has two ends to it: demand and supply. When the two ends meet, economic activities are created. These two ends meet only when there's logistics support. So, logistics need to be dealt with by the best of the people. Currently, logistics is handled by various Ministries and Departments — the railways, roads, shipping, aviation etc. Prime Minister Narendra Modi took the path-breaking decision to create a separate logistics division within the Ministry of Commerce and Industry. If you want to increase India's GDP, logistics will play a key role. If you want to improve the Ease of Doing Business, the right logistics will be essential.
On asking why the Commerce Ministry is housing the division, he opined logically, the logistics division has to be in the Ministry of Commerce and Industry. This is the Ministry that deals with trade. Can there be trade and Commerce without logistics? Even the barter system of earlier days needed logistics. If there's one impediment coming in the way of India's becoming a super economic power, it's logistics. We must increase speed in logistics and reduce costs. And the costs will come down only when the time taken on transit gets reduced.
Elaborating on following International Logistics Benchmarks, he said we have been in discussion with countries such as Singapore which have the best practices in logistics. Japan is a classic example where logistics cost is minimal. It has been practising a concept called Just In Time under which manufacturing companies don't maintain any inventory. No inventory means no loss in warehousing. But how is Just in Time made possible in Japan? It's because of right logistics: the inputting and despatch of final products are well in order. Also, demand is factored in properly so that the product can be despatched immediately. Speaking on the targets of this division he opined I don't want to announce a huge target. Digitalisation is our key strategy. We are creating a digital logistics platform for the industry to increase the speed of logistics and reduce costs. If a consignment is to be transported from, say, Mumbai to Kolkata, why not part-use the rail and part-use the road? But the right decision can be made only when we know the exact cost and time taken. A digital platform can make that happen.