Policy for improving productivity in transport sector . . There are number of reasons for low productivity in transport sector - ranging from bad roads, narrow bridges, aging vehicles, heavy traffic, unskilled drivers, paper work involved in check-posts, delay in loading and unloading that lead to endless waiting in every place. Various kinds of taxes result in submission of variety of statutory declarations and forms for carriage of goods by a truck. Therefore, every trip is like a hurdle race for trucks. Indian trucks travel 280 km per day on an average compared to 400 km and 700 km of world and US average per day respectively. This inefficiency is indirectly getting loaded into the cost of products they carry. The increase in productivity results in increased fuel efficiency and capacity utilization of vehicles that translates into higher GDP and per capita income in economy eventually. The government needs to evolve a comprehensive policy for improving productivity in transport sector. Implementation of GST could lend the much desired boost to productivity in transport sector. Apart from widening the tax base, this will help creation of unified market facilitating easy movement of goods across the states. However, the governments strategy should be multipronged with a wider objective of improving overall productivity in transport sector. Therefore, the policy should be evolved taking into account various factors including GST, road tax and judicial system. The discussions about legal reforms would be more meaningful if the objectives are clearly spelt out; say, inter alia improving productivity in transport sector as a whole by 50% over the next 4 years. Different procedures for registration of vehicles and anomalies existing in road taxes from state to state should be removed. Taxation on purchase, ownership structure, road taxes and regulations for operation of trucks and vehicle inspection/ certification should be made uniform for the whole country. Most of the transport companies in private sector own few trucks and drivers are not covered under any pension or retirement scheme. Mergers within the industry should be encouraged to make the entities economically viable and operationally flexible. Developing a pool of well trained and experienced drivers in the industry is a pre requisite for higher productivity. A national scheme for protecting the interests of the employees in this unorganized sector should be devised with the active participation of insurance companies for a healthy growth of the industry. The efficiency of the transport industry reflects in the performance of various other industries and the economy. For example, according to a FICCI survey Bottlenecks in Indian Food Processing Industry - 2010 the inadequate support infrastructure is the biggest bottleneck in expanding the food processing sector that includes inadequate cold storage and warehousing facilities, road, rail and port infrastructure. Investment by private sector in this industry should be stepped up for technology up-gradation at all levels. The government should come up with new schemes to encourage public-private-partnership for development of new warehouses and modernization of the existing warehouses with cold storage facilities for agricultural produces and perishable goods like fruits and vegetables. FDI in E-commerce and retail will accelerate the infrastructure development with overall positive impact on economy. Perhaps, synchronizing development plans for road transport sector with railways, airport and sea port for debottlenecking of infrastructure facilities could be the first step in improvement of productivity in the entire transport sector. The huge difference between the global and national productivity levels should be eliminated in phases with target time lines. This could not be achieved without legal reforms that address the current needs of the industry in the back drop of technological developments embraced by the world. In order to achieve the overall objective, a nodal agency may be established for effective coordination among various ministries in the implementation of policies.
Posted on: Fri, 23 Jan 2015 08:53:06 +0000
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