Context: Recently, the Ministry of Commerce and Industry has released the Logistics Ease Across Different States (LEADS) Report (Index) 2021.

Key Findings

• Gujarat has been adjudged as the  Best Performing State.
• Haryana second while Punjab got the third position as per the report.
• Uttar Pradesh is the top improver. 
• This reflects the efforts that have been done in improving the quality of infrastructure.

Need for better logistics infrastructure and Government’s Efforts

Ease of Doing Business and Ease of Living

• Improved ranking will fetch more investment and a cycle of economic growth will be fueled.
• During the COVID period, the government was able to manage critical requirements due to efficient infrastructure.
• Bring down costs: We must lead our way to bring down logistics costs by 5 per cent over the next 5 years.

PM GatiShakti Master Plan

• It would revolutionize the next generation of multimodal infrastructure development in the country.
• Better logistics would help India in its commitment to build modern infrastructure for the 21st century, at a pace never seen before. 

About Logistics Ease Across Different States (LEADS) Index

• It is a composite indicator to assess international trade logistics across states and Union territories. 
• LEADS is an attempt to bring Longevity, Efficiency, Accuracy, Durability, and  Smartness in the Logistics sector.
• It is a perception-based survey. 
• It is based on a stakeholders’ survey for the Ministry of Commerce and Industry.
• LEADS is influenced by the World Bank’s biannual Logistics Performance Index (LPI).

LEADS is based on eight parameters. These are

• Infrastructure, 
• Services, 
• Timeliness, 
• Track and trace,
• Competitiveness of pricing, 
• Safety of cargo, 
• Operating environment and 
• Regulatory process. 

Need for this report

• India’s logistics costs account for 13-14% of Gross Domestic Product (GDP), compared to 7-8% in developed countries.
• The government was aiming to bring down logistics costs by 5% over the next 5 years.
• Estimated logistics costs in India are currently about 14%, which is quite high compared to 8-10% globally.
• Efficient logistics was pivotal to bring ease and empowerment to businesses as well as citizens.
• Logistics contributed immensely in our fight against Covid-19 by taking essential supplies including liquid Medical Oxygen throughout the country during the 2nd wave.

Road Ahead

• States should frame state level logistics policy & logistics master plan, use single-window clearance system for logistics, establishment of grievance redressal mechanism and enable skilling in logistics through State skilling infrastructure.

By: Shubham Tiwari