Gati Shakti master plan may help cut logistics cost to 8% of GDP

Railways looking at Rs 50K cr of investments under the project

The government is working towards reducing the logistics cost to 8 per cent of gross domestic product (GDP) from 13 per cent now, and initiatives such as the recently launched Gati Shakti — or the national master plan for multimodal connectivity — will help in that.
 
“A reduction of 5-6 per cent in logistics costs would mean Rs 20-trillion savings — which is not an easy job,” Commerce and Industry Minister Piyush Goyal said a day after the master plan was launched. The minister, however, did not divulge any timeline towards achieving that target.
 
High logistics cost typically impacts the competitiveness of domestic goods in the international market, while lowering it can boost domestic manufacturing.
 
“The PM Gati Shakti will not only save money, but also time and effort. Infrastructure development will help the country as it comes out of the Covid-induced economic slowdown. It will not only generate large-scale jobs, but also attract investments,” he said at the media briefing on Thursday.
 
Gati Shakti, which is a digital portal, is a governance tool and aims towards developing the best multimodal transport system. The portal, which is currently in a beta mode, has brought 16 ministries, including rail and roadways, together for integrated planning and coordinated implementation of infrastructure connectivity projects. Over a period of time, states’ portal will also be integrated with the Gati Shakti portal, Goyal said, adding that BJP-ruled states have shown keen interest in joining this initiative. As far as the monitoring of the master plan is concerned, a project monitoring group in the department for promotion of industry and internal trade (DPIIT) will regularly check on the projects and report to an empowered group of secretaries, headed by the cabinet secretary.

Speaking later at another press conference, Rail Minister Ashwini Vaishnaw said that 500 multimodal hubs will be developed under Gati Shakti. “We are expecting 500 multimodal hubs to be developed under the Gati Shakti mission. We are looking at Rs 50,000 crore worth of extra investment in this sector over the next five years,” Vaishnaw told Business Standard. “In the next three years, we are looking at 300 new terminals,” he added.
 
Responding to a query on how the mission integrates with the National Rail Plan 2030, Vaishnaw said, “The National Rail Plan is a comprehensive document looking at the railways’ potential — cargo and passenger potential — and what is the kind of investment that will have to be made. Gati Shakti, on the other hand, is the integration of various modes. So, both are in a way complementary to each other and that is the thought process with which the Railways will move.”
 
According to Vaishnaw: “Once we get more cargo, the cargo earnings will improve and that will improve the operating ratio,” he said.