Multi Modal Logistics Parks

Multi Modal Logistics Parks UPSC: Relevance

• GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

MMLP UPSC: Context

• Recently, the government has increased the concession period for the proposed Multi Modal Logistics Parks (MMLP) under the Bharatmala scheme to 45 years from 30 years.

MMLP India: Key pints

• The earlier plan was 30 years, extendable by another 30 years. Now, the initial concession period is limited to 45 years, but without any further extension.
• It is estimated that the 35 MMLPs planned across the country under Bharatmala Phase-I will entail a capital allocation of ₹50,000 crore.
• In June this year, the government has identified 11 locations across the country to set up multi-modal logistics parks (MMLPs) under the second phase of Bharatmala Pariyojana scheme.

What is Multi Modal Logistics Park?

• MMLP is the refined form of Logistics Park where various value-added services are rendered in addition to rail/road based transportation.
• It is now-a-days a globally identified supply management and known by different names in different countries.
• Earlier, India has never had an integrated plan to develop logistic parks.
• The MMLPs have been conceptualized to enable seamless intermodal freight movement and offer multiple functionalities such as freight aggregation and distribution.
• Storage and warehousing solutions and value-added services such as custom clearances and IT services will also be provided to users.

MMLP benefits

• Through the 53 MMLPs planned in total, the government aims to reduce logistic costs from the current 14-16% of the country’s gross domestic product (GDP) to about 9%.
• It also hopes to create two lakh jobs with these as mega logistic parks are likely to trigger creation of manufacturing or assembling clusters around these facilities, while massively cutting freight transportation costs and time.
• The programme also focuses on optimising efficiency of freight and passenger movement across the country by bridging critical infrastructure gaps through effective interventions such as economic corridors and multi-modal integration through roadways, logistic parks, ports, and ropeways among others.
• The series of MMLPs will provide efficient trans-shipment and processing facilities, besides a comprehensive plan has been made to address all segments of the logistics sector.

Steps taken by the Government to improve the logistics sector

• Due to the deregulation of diesel prices, logistics costs have become more accurate than before.
• Many schemes like Bharatmala and Sagarmala aims to improve the logistic sector in the country.
• Establishing Dedicated Freight Corridors like East-West DFC, North-South DFC.
• Implementing GST, which has led to a reduction in regulatory compliances. This would ensure a shift in warehousing locations and a reduction in transportation costs.
• The Make-in India program focuses on the manufacturing sector, which has high logistics dependence.
• Giving infrastructure tag to logistics to attract more investment in this sector.
• At the end of FY 2020, the average Turn Around Time (TAT) for Indian ships improved to 2.1 from 4days in 2014-15, against the global average of 0.97.

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