World Bank's biennial index perception based and narrow, says Centre

Earlier this year, India's rank went up by six places to reach the 38th rank out of 139 countries in the seventh edition of Logistics Performance Index (LPI 2023)

The government believes that the biennial index — Logistics Performance Index (LPI) — by the World Bank, to assess ease of trade across countries, is purely ‘perception based’ and ‘narrow.’

India wants the World Bank to take into account several measures taken by the government on the logistics front, such as the GatiShakti initiative, while determining the logistics ranking of countries, special secretary in the department for promotion of industry and internal trade (DPIIT) Sumita Dawra told reporters on Thursday.

Earlier this year, India’s rank went up by six places to 38th out of 139 countries in the seventh edition of the LPI 2023. 

India has started engaging with World Bank’s key officials, drawing their attention towards emphasis on objective-based methodology for the ranking. 

Currently, six parameters are used to measure performance of the countries. They are customs, infrastructure, international shipments, logistics competence, tracking and tracing, and timelines.

“We feel this is a very narrow way of ranking India on important global indices. There is a lot of work going on and that should be reflected in the calculations,” Dawra.

“We want our ranking to improve and it will improve only when there is a realistic and factual reflection of the kind of reforms, which have happened here...We would like to showcase those and it (World Bank) should take into account these while determining our ranking,” Dawra said.

Determination of logistics cost 

The government is also working on a framework to assess the logistics cost in the country and is expected to get a realistic estimate by the end of the month. “The draft report is ready,” Dawra said.

The government is going by certain estimates, which suggest that India’s logistics cost stands at about 8-14 per cent of the gross domestic product (GDP).

“Now, we have a baseline estimate, and from next year, we will do a survey-based thing to calculate the cost,” she said.

National Council of Applied Economic Research (NCAER) and Asian Development Bank (ADB) have been engaged to complete the exercise.