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EAC-PM recommends separate Logistics Department and introduction of one permit one tax system for trucks

Setting up a separate Logistics Department and introducing one permit-one tax system for trucks, among other measures, will boost the transport sector and improve ease of doing business, the Economic Advisory Council to the Prime Minister (EAC-PM) has suggested.

These suggestions form part of the Bibek Debroy-led Logistics Development Committee's report titled 'Key Challenges in Logistics Development and the Associated Commerce - Policy Reforms for Ease of Doing Business/Trade in India' which was submitted to Prime Minister Narendra Modi recently.

Outlining the need for supporting the truck industry, the Committee has suggested that the government should create an independent department focusing on Logistics and trade facilitation space by upgrading the existing Logistics Division under the Ministry of Commerce and Industry.

"Introduce the One Nation, One Permit, One Tax system by amending Motor Vehicles Act as recommended by the Parliamentary Committee.
"Also suitably amend the provisions of Motor Transport Workers Act to incentive trucking industry to increase its scale and size," the committee suggested. As per the one permit-one tax system, all truck permits will be valid across the country.

It also pitched for reduction and rationalization of rail freight tariff structure, at least on select pilot routes (Delhi-JNPT, Delhi-Mundra etc).

According to the report, the government should target increasing rail modal share by improving predictability in railway services, rationalizing railway tariffs and expediting the commissioning of Dedicated Freight Corridor (DFC).

The committee also pitched for developing Common Development Plans for revival of railway sidings near major airports for promoting multi-modal air-rail connectivity and easing last mile connectivity to airports.

To improve trade facilitation at borders, it said the government should shift towards fully facilitated trust-based clearance processed through state of-the-art risk management system (RMS) and make physical examination an exception.

It pointed out that while the physical infrastructure augmentation projects (like Bharatmala, Sagarmala, DFC) are transformational in nature, some major governance and procedural reforms are incremental in nature.

Findings of the World Bank's Doing Business (DB) report 2018 suggest that it took more than six days to export and more than 13 days to import in India, considerably higher than the time taken in the developed world.

Meanwhile, India saw a jump of 19 positions in International Logistics Performance Index (LPI) -- from 54th rank in 2014 to 35th position in 2016 out of 160 countries.

The Prime Minister has set an ambitious target to realize a quantum jump in Doing Business and LPI ranks within the next 2-3 years. This will be difficult to achieve if we fundamentally do not reorient the way we have looked at logistics and trade facilitation space," the committee said.

It also noted that the requirement of physical paperwork and multiple documentation continues despite push towards digital governance.

According to the report, the road freight cost per ton per km in India is almost double (after adjusting for PPP) than that of US while the average speed is substantially lower than in developed countries.

 

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