“Efficient logistics is the backbone of a successful economy, enabling businesses to access markets, reduce costs, and increase productivity, ultimately leading to sustainable economic growth.” – Nitin Gadkari, Minister of Road Transport and Highways.

Central Idea

• The Union Budget 2023 has increased the PM Gati Shakti National Master Plan’s budget from ₹5,000 crore to ₹10,000 crore and allocated ₹2.4 lakh crore to the Indian Railways. This plan aims to improve India’s logistics competitiveness by increasing the railways’ share in freight movement from 27% to 45% and addressing infrastructural challenges. However, several challenges such as operational and connectivity issues, infrastructural challenges, and lack of integration need to be addressed to achieve these targets.

What is PM Gati Shakti National Master Plan?

• Comprehensive development: It is a comprehensive infrastructure development plan announced by the Government of India in November 2021.
• Aim: The plan aims to improve economic growth and sustainable development by focusing on infrastructure such as roads, railways, airports, ports, mass transport, waterways, and logistics.
• Increased Budget: The Union Budget 2023 has increased the budget for the PM Gati Shakti National Master Plan
• The plan includes the development of five main corridors:
• East-West Corridor: It will connect the east and west coasts of India, stretching from Silchar in Assam to Porbandar in Gujarat.
• North-South Corridor: It will connect the northern and southern parts of India, stretching from Srinagar in Jammu and Kashmir to Kanyakumari in Tamil Nadu.
• North-East Corridor: It will connect the northeastern states to the rest of India, stretching from Imphal in Manipur to Kohima in Nagaland.
• South-West Corridor: It will connect the southwestern states to the rest of India, stretching from Ratnagiri in Maharashtra to Kanyakumari in Tamil Nadu.
• East Coast Corridor: It will connect the east coast states to the rest of India, stretching from Kolkata in West Bengal to Kanyakumari in Tamil Nadu.
• The railways have a pan-India network and offer an efficient and economic mode of logistics movement, making them an essential component of the plan.

The Freight Movement at Present

• Freight movement Impact: Currently, 65% of freight movement is done by road transport, leading to congestion, pollution, and increased logistics costs.
• convenience over cost: Although the cost of rail transportation is less than road transportation, convenience has taken precedence over cost, and the railways have lost their share in freight movement to more flexible modes.
• For instance: In 2020-21, coal constituted 44% of the total freight movement of 1.2 billion tonnes, followed by iron ore (13%), cement (10%), food grains (5%), fertilizers (4%), iron and steel (4%), etc.
• Non-bulk commodities: Transportation of non-bulk commodities accounts for a very small share in the rail freight movement
• Rise in Container Traffic: The convenience of moving non-bulk commodities in containers has led to an increase in containerized traffic. Globally, railway systems are heavily investing in advanced rail infrastructure for quick and low-cost container movement.

Infrastructural, Operational, and Connectivity Challenges

• The national transporter faces several challenges, leading to a shift of freight traffic to roads.
• Infrastructure: Increased transit time by rail, pre-movement and post-movement procedural delays, lack of necessary terminal infrastructure, maintenance of good sheds and warehouses, and uncertain supply of wagons are some of the infrastructural challenges that customers face.
• Connectivity: The lack of integrated first and last-mile connectivity by rail increases the chances of damage due to multiple handling and also increases the inventory holding cost.

Strategies to Improve Efficiency in Rail Cargo Movement in India

• Overall improvement: The Indian Railways need to improve infrastructure and encourage private participation in the operation and management of terminals, containers, and warehouses to efficiently utilize resources.
• Special Entity Needed: Establishing a special entity under the railways to handle intermodal logistics in partnership with the private sector could address the first and last-mile issue faced by the railways.
• For instance: An integrated logistics infrastructure with first and last-mile connectivity is essential to make rail movement competitive with roads, and facilitate exports by rail to neighbouring countries such as Nepal and Bangladesh.
• An Uber like model: An Uber-like model for one of the two cargo wagons, wherein the customer can book the wagon using an online application, could help in increasing the utilization rate of these wagons.

Way ahead

• The adoption of railways for cargo movement is crucial to improve India’s logistics competitiveness.
• The Indian Railways are upgrading their infrastructure with PM Gati Shakti, but a continuous monitoring of existing projects and identification of new priority areas are required to achieve the targets of rail freight movement.

Conclusion

• The PM Gati Shakti National Master Plan has the potential to transform India’s logistics infrastructure and increase the railways’ share in freight movement. However, several challenges such as operational and connectivity issues, infrastructural challenges, and lack of integration need to be addressed. The upcoming Dedicated Freight Corridors, multimodal logistics parks, and establishment of a special entity under the railways could address these challenges.

Mains Question

Q. Explain the PM Gati Shakti National Master Plan and its significance in improving India’s logistics competitiveness.

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