Govt Likely To Come Out With Logistics Cost Estimate By Sept

New Delhi, Sept 19 (KNN) The Union government is closely working with the members of industry, foreign experts to arrive at an estimated total logistics cost for India, Sumita Dawra, Special Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), told Moneycontrol in an exclusive interview.

"We have a task force comprising people from the government, research organisations, think tanks, as well as the industry collaborating with us on this. We are likely to come out with the logistics estimates by September this year," she said.

The task force was formed in March of this year when a need was felt to develop a framework for the calculation of logistics costs on a periodic basis. This 18-member task force has been working under the chairpersonship of Dawra to develop a framework for the calculation of logistics costs in India.

"The taskforce has taken about four months to arrive at the baseline estimate,Apart from that, we also have to figure out how to improve that baseline so that we have more authentic information rather than making assumptions for the administrative and inventory costs. That framework too has been developed by this task force for the long term," she added.

As per reports, with this, the DPIIT will now be able to show a clear year-on-year comparison of how the National Logistics Policy is helping to reduce logistics costs.

Currently, the industry works with various estimates ranging between 8-14 percent of the gross domestic product (GDP). However, the wide variation in estimation has raised some questions.

"When there is such a wide variation in the estimation, naturally, there will be a question of credibility. We looked at the estimate of 14 percent given by consulting firm Armstrong & Associates but found that there is no clear basis for that," says Dawra.

So the department is now using a 2018 report by the National Council of Applied Economic Research (NCAER) as a baseline for the calculation of logistics costs. The report put India’s logistics costs at 8.35 percent of GDP.

However, the government has faced a backlash from India Inc, which has estimated the total logistics cost to be around 14 percent of GDP.

The government is now building their own estimate by looking at Ministry of Statistics and Policy Implementation (MoSPI) data sets and supply use tables, among others. (KNN Bureau)