Economy grows when money changes hands with value transfer. But along this movement, if goods
don’t move with the ever-increasing pace then the inefficiency and its consequent seven types of
loses, at the national and global level, have multiplying negative impact which renders a
country uncompetitive. Further, global warming and the associated social implications are far
reaching as the negative externalities weigh high on the already high tax paying society. In the
ocean of overcapacity and warehouses brimming full, one finds people toiling in under
employment.
India’s intent to achieve 5 trillion GDP needs this addressed squarely and the earlier the
better. Before we chase trillions of fresh funds for growth, we need to plug in the shear
resource waste. It’s a low-lying fruit as compared to developing long term technology edge where
a many country are decades ahead.
We certainly need national grids of Rail, road, air and water and the related infrastructures,
in addition to the water grid, digital grid and energy grid, but all these will come to naught
if the freight carriers do not improve upon to be the best in the world, to give us competitive
advantage. As per one of the recent estimates, India’s logistics cost is about 14% as compared
to the world best at less than 9%.
Let’s do something specific in this domain by taking a country wide initiative. Why not turn a
problem as an opportunity to leap!
Most of the entrepreneurial striving remains dwarfed at MSME Scale, not because of capabilities
and capacities, but due to structural issues and plethora of hindrances on the way from start-up
onwards. Logistics happens to be one of them. Someone pays for the high idle time of these
trucks, manual loadings and warehousing and old and overloaded trucks chugging along to somehow
reach the destination. The average speed of freight is at a snail pace of no more than 30kmph.
While government has come out with an aspirational e-Vehicle policy and budget support for
Passenger Vehicle, there is nothing in this budget which peps up the languishing Commercial
vehicle market.
Let’s up the game…few thoughts
1. Create a Bharat Freight Grid (BFG) Corporation which is an integrated, connected and agile
freight movement with multiple objectives. This is created through SPV and with PPP Model. A
special infra bond to be created to build the initial corpus of say 50,000 crores. FPI is
allowed to invest too. Commercial vehicle manufacturer can also buy the bonds in bulk and
available to general public too. This SPV is be managed by a private third party.
2. In the first phase, all the old trucks more than 10years old to be scraped and replaced by
Bharat VI trucks. A massive incentive to be given through a combined contribution by Government
through GST forgone (from the present 28%) and matched by equal amount/percentage by the
manufacturers. Say, 10% each thus reducing truck price by 20% or more.
3. The declared price and model will be available to the purchaser of new trucks in proportion
to the bond bought by the Truck Manufacturer with an upper cap. An algorithm can be created to
arrive at a fair play among truck manufacturers while giving free choice to the buyers.
4. The trucks will have a distinct look with radio tag, GPS and connectivity with no toll tax
and road tax so that they move with great pace and ease throughout the country. These trucks can
be further connected through a portal to Railways and Air freight, at one end with micro
mobility network and at the other for a seamless long distance freight movement across the
country. These will have a national permit. The implementation of Blockchain, AI and other
technologies can help track each to provide seamless movement without any stoppage.
5. Any fraudulent practice and player would be dealt with strict law enforcement.
6. This platform will be akin to UPI payment gateway and does not replace the exiting logistics
players but rather show cases on the future of freight mobility. It will kick start a new
national freight movement which is marred with various constraints hence the existing players do
not come forward to change the game and take it as given - why boil ocean for your cup of tea/!
7. A third party can be further engaged to scrap and use the material out of scraped trucks and
the money realised through scrap can be also offered as further discount.
8. The MSME, depending upon the size of their enterprise, can get a different discount and
preferences based on an algorithm. Benefit where it is needed most.
Will the four ministers from Finance, Transport, Commerce and Heavy Industry join hands and
invite the Indian stalwarts of Tata, Mahindra, Ashok Leyland and MNC CEO's Daimler, Volvo to
show case to the world, how Economical, Environmental and Social impact be created in the
challenging times like these?
Incrementalism is not the lexicon of the great leaders!