”GS Paper – 3: Mobilization of Resources, Government Budgeting, Fiscal Policy, Government Policies & Interventions”
Why in News?
- Ministry of Commerce and Industry releases report on Logistics Ease Across Different States (LEADS) 2021.
- The index is developed by the commerce and industry ministry along with Ernst & Young.
Background:
- The LEADS survey 2021 was conducted from May-August 2021 amid the Covid pandemic.
- The whole exercise garnered 3771 responses from 1,405 respondents across the country.
- For representation purposes, states have been ranked in three separate classes including the ‘North Eastern States & Himalayan UTs’ and ‘Other UTs’ groups.
Importance of LEADS:
- LEADS report will push healthy competition for improvement in logistics development among States.
- LEADS is a continuous exercise(Fist released in 2018), and the MoCI is enthused to provide a pivotal role in initiating, creating, and connecting all the stakeholders to bring in the required improvements in the logistics space collaboratively.
- It is a handy & practical guide to identify strengths, opportunities & improve the logistics performance of States.
- With Competitive & Cooperative federalism, LEADS is creating an Ecosystem for Excellence by bringing in a healthy competitive spirit where everyone is persuaded to improve.
- It Follows a progressive methodology to provide a granular insight on the logistics performance at State/UTs level.
- Inputs of the report to act as significant stimulants to PM GatiShakti National Master Plan.
- Inputs are given by Logistics Ease Across Different States Report 2021 can lead the way to bring down logistics costs by 5% over the next 5 years.
How States Performed this Year?
- Gujarat, Haryana and Punjab have emerged as the top performers in the LEADS 2021 index respectively.
- Jammu and Kashmir bags the top rank among the North Eastern States and the Himalayan Region followed by Sikkim and Meghalaya.
- Delhi stands at the top rank among Other UTs.
- Uttar Pradesh, Uttarakhand and Jharkhand have witnessed a remarkable improvement in their ranks compared to the 2019 LEADS ranking and have emerged as the top improvers.
Why Logistics is Important?
- Efficient Logistics is pivotal to bringing ease and empowerment to businesses as well as citizens.
- Efficient logistics was pivotal to bringing ease and empowerment to businesses as well as citizens.
- Logistics contributed immensely to our fight against COVID-19 by taking essential supplies including liquid Medical Oxygen throughout the country during the 2nd wave.
- Rather than just absolute improvement in one State, improvement of logistics across all States, will be a force multiplier for the entire logistics ecosystem
- Logistics is an enabler of multiple visions- From Make in India for the World to Last Mile Delivery.
- To achieve ambitious targets we cannot afford to walk but we need expressways of Land, Air & Water.
What is PM GatiShakti Master Plan?
- The Union Cabinet cleared the PM GatiShakti – National Master Plan for multi-modal connectivity to economic zones on 21st October 2021. It is a giant stride in India’s ambitious goal of achieving US $5 trillion economy.
- Besides cutting logistics costs, the scheme is also aimed at increasing cargo handling capacity and reducing the turnaround time at ports to boost trade.
- The PM GatiShakti will ensure that India of the 21st century does not waste money or time due to lack of coordination in infrastructure projects. Under the PM GatiShakti National Master Plan, everything, from roads to railways, from aviation to agriculture, various ministries and departments would be linked. A technology platform has also been prepared for every megaproject so that every department has accurate information on time.
History of LEADS:
- The first version of the report, LEADS 2018, focused on export-import trade and assessed the efficiency of the logistics ecosystem in each State and UT.
- The second edition of the study – LEADS 2019, covered both international and domestic trade.
- The LEADS 2021 exercise has gone one step ahead in analysing the domestic and EXIM logistics ecosystem of the state. Specifically, two improvements have been done in the overall assessment framework.
- Firstly, objective parameters have been used along with the perception-based indicators for index formulation.
- The objective parameters in the LEADS 2021 Index have been introduced by way of an objective survey instrument administered to the States/UTs and by the inclusion of secondary datasets on logistics across the State/UT level.
- Secondly, the statistical methodologies to build the index has been updated to get more robust results, given change in the overall framework.
- Alternatively, a total of 21 perception and objective variables have been statistically analysed to prepare a composite index basis upon which the states have been ranked.
- The perception survey was administered to the four different categories of logistics stakeholders, viz. traders/ shippers, transport service providers, terminal operators, and logistics service providers.
- The report is structured along the three dimensions which collectively influence logistics ease- Infrastructure, Services, and Operating and Regulatory Environment which are further categorised into 17 parameters.