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Budget 2020 Should Ensure Greater Focus On Eco-Friendly Logistics

There is a need for the government to focus and invest more in the National Centre for Artificial Intelligence and AI hubs that will help the start-up ecosystem garner the benefits of these technologies.

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Logistics is a key growth driver of the Indian economy. It is also one of the biggest job creators in the world. With technology giving impetus to the logistics sector, it is poised to become a $215 billion industry in 2020. 

Having said that, growth in the logistics industry means a drastic increase in transportation activities. Unfortunately, this will directly contribute to the growing levels of carbon emission across the world, if not kept in check. Embracing digital means of executing logistics activities is of immense importance here. 

In this budget, the government should increase focus on chalking out strict regulations that drive eco-friendly logistics by embracing digital tools. By digitalizing core logistics operations like automating route planning, one can reduce miles per delivery and reduce fuel consumption. Real-time digital alerts can minimize vehicle idling time. It can prevent unnecessary diversions that add more miles to a delivery. Digitalization also reduces dependency on paper usage. All these significantly curb carbon emissions.

Although technologies like predictive analytics and IoT have given the much-needed network visibility, automation, and better fleet management to logistics companies, there is a lot of room for improvement. “The government has always supported digital initiatives, but there are some areas that can be enhanced. Increasing infrastructure funding, greater digital penetration, and generating skilled labour will give businesses dependent on logistics a much-needed boost,” says Nahata.

The government’s increased focus on new-age skills like Artificial Intelligence, Internet of Things, Big Data and Robotics during last year’s budget increased hopes of the logistics and supply chain industry. But, it is still facing bottlenecks in terms of funding, a significant prevalence of manual processes, and strict norms for e-commerce.  

We need more people skilled in using and implementing advanced technologies like AI and machine learning.  At the same time, a greater focus on mandating the digitalization of certain key accounting, billing, and logistics processes are also needed to boost compliance and curb corruption.
There is a need for the government to focus and invest more in the National Centre for Artificial Intelligence and AI hubs that will help the start-up ecosystem garner the benefits of these technologies.

Honourable Finance Minister, Nirmala Sitharaman, in her maiden budget last year had announced Rs 100 lakh crore investment in infrastructure to be done over the next 5 years for enhancing railway corridors, restructuring national highways and leveraging inland waterways for smoothening internal trade.

There is a need to expedite the development process of projects like the Dedicated Freight Corridor (DFC). In the present budget, I am expecting some positive announcements with regard to building integrated transportation hubs or Multi-Modal Logistics Parks.

The existing government has always been supportive of digitalization. Having said that, it will be welcoming news if the government plans to invest more in digital infrastructures to enhance connectivity in the rural parts of the country. Connectivity is essential to ensure logistics optimization and mitigate transportation risks.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
Union Budget 2020 Union Budget 2020-21 logistics

Kushal Nahata

As the CEO, Kushal is responsible for driving the vision, strategy and growth at FarEye. Kushal drives the culture of ‘customer-first’ at FarEye which enables the team to deliver value to FarEye’s 100+ clients globally.

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