Governance
Fast Tracking Freight in India: NITI Aayog
- 10 Jun 2021
- 5 min read
Why in News
NITI Aayog, Rocky Mountain Institute (RMI) and RMI India’s new report, Fast Tracking Freight in India: A Roadmap for Clean and Cost-Effective Goods Transport, present key opportunities for India to reduce its logistics costs.
- RMI is an independent nonprofit organization founded in 1982.
NITI Aayog
- It is a public policy think tank of the Government of India, established with the aim to achieve sustainable development goals with cooperative federalism by fostering the involvement of State Governments of India in the economic policy-making process using a bottom-up approach.
- It was established to replace the Planning Commission. The Prime Minister is its ex-officio chairman.
Key Points
- Growing Freight Transport Demand:
- Due to the rising demand for goods and services, freight transport demand is expected to grow rapidly in the future.
- While freight transport is essential to economic development, it is plagued by high logistics costs and contributes to rising carbon dioxide emissions and air pollution in cities.
- India’s Potential: It has the potential to:
- Reduce its logistics cost by 4% of Gross Domestic Product (GDP).
- Achieve 10 gigatonnes of cumulative carbon dioxide emissions savings between 2020 and 2050.
- Reduce Nitrogen Oxide (NOx) and Particulate Matter (PM) emissions by 35% and 28%, respectively, until 2050.
- Accommodating More Urban Citizens:
- As India’s freight activity grows five-fold by 2050 and about 400 million citizens move to cities, a whole system transformation can help uplift the freight sector.
- This transformation will be defined by tapping into opportunities such as:
- Efficient rail-based transport.
- Optimisation of logistics and supply chains.
- Shift to electric and other clean-fuel vehicles.
- These solutions can help India save Rs. 311 lakh crore cumulatively over the next three decades.
- Need to Make Freight Transportation Cost Effective:
- Freight transportation is a critical backbone of India’s growing economy, and now more than ever, it’s important to make this transport system more cost-effective, efficient, and cleaner.
- Efficient freight transport will also play an essential role in realising the benefits of existing government initiatives such as Make in India, Atma Nirbhar Bharat, and Digital India.
- Recommendations:
- Increasing the rail network’s capacity, promoting intermodal transport, improving warehousing and trucking practices, policy measures and pilot projects for clean technology adoption, and stricter fuel economy standards.
- When successfully deployed at scale, the proposed solutions can help India establish itself as a leader in logistics innovation and efficiency in the Asia–Pacific region and beyond.
- Recent Initiatives:
- Dedicated Freight Corridor (DFC):
- It is a high speed and high capacity railway corridor that is exclusively meant for the transportation of freight, or in other words, goods and commodities.
- E-Way Bill Integration with FASTag, RFID:
- It will enable tax officers to undertake live vigilance in respect of E-Way Bill compliances by businesses, stop revenue leakage and will facilitate movement of large goods vehicles.
- FAME Scheme:
- The Indian government has created momentum through its Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles schemes that encourage, and in some segments mandates the adoption of electric vehicles (EV), with a goal of reaching 30% EV penetration by 2030.
- Bharat Stage VI norms:
- It includes a wide list of technology modifications, the most significant being making OBD (On-board diagnostics) mandatory for all vehicles.
- Corporate Average Fuel Efficiency (CAFE) Regulations:
- The CAFÉ standards were first notified in 2017 by the Union Ministry of Power (MoP) under Energy Conservation Act, 2001.
- The regulation is in accordance with the fuel consumption standards of 2015 that aim to increase fuel efficiency of vehicles on the road by 35% by 2030.
- Dedicated Freight Corridor (DFC):
