Planning Commission urges for integrated transport system
The 6th annual Automotive Logistics India conference, recently held in Pune, was characterised by a new level of openness and debate among the 300 delegates, and a desire to move on from recitals of familiar problems to engaging together to solve them.
Amid recent uncertainty about economic growth there remains confidence that, despite not being able to accurately forecast it, India is still on its way to 5 million annual car sales within a handful of years. That compares with an expected 2.6 million for 2012, and will move the country up to being the world’s third biggest car market, after China and the USA.
Overall, India is “nearing an inflection point” at which its economic growth will increase rapidly, says consultancy Roland Berger. Having started its economic liberalisation about 15 years after China, the next 15 years will see “dramatic” reductions in poverty and put India on course to be the world’s third largest economy in terms of purchasing power by 2020.
The conference featured participation from a high level of national government, with a keynote address by Vinita Kumar, senior advisor for transport at the Planning Commission. Kumar said that transport- related issues are a focus of India’s 12th Five Year Plan, which is a year underway. She noted its intention of raising the share of GDP invested in transport from 7 per cent to 10 per cent, which she characterised as a “five lakh crore programme” (50 trillion rupees or $1 trillion).
The conference this year also featured several new voices and themes, and heard that private investment in rail is back on the agenda. Weaknesses in policy that have characterised debate at the previous five Automotive Logistics conferences were acknowledged by the Planning Commission.
Kumar reviewed many welldocumented challenges, including an over-reliance on a road network which is itself under-developed, bottlenecks and capacity constraints at ports, a general lack of multimodal transport including under-use of rail, and maze of bureaucracy that makes moving goods cumbersome and costly.
The latest Five Year Plan includes a range of upgrades to rail infrastructure and rolling stock, as well as roadworks and some port developments. The share of the investment anticipated from the private sector is expected to grow substantially from its current levels of around 25 per cent, she said. In general, the intention is to have more ‘optimally distributed’ transport with more intermodal and move away from the present excessive reliance on road.
The Planning Commission estimates that for the financial year 2012-13 India will have moved 1,025m tonne by rail, and nearly twice as much as that by road. Port cargo will have reached 1,032m tonne, though coastal shipping will have moved only 125m tonne. In total, rail transport will have accounted for around 30 per cent of freight movement (although it is much lower for automotive), with just a few percentage by water and air. Unfortunately the bias to road transport will get worse in the near future.
Kumar also acknowledged “the near-absence of an integrated regulatory regime for overseeing tariff-setting, the cost of operations, anti-competitive practices, etc.” However, her description to delegates of the content of the 12th national plan did not include any reference to tackling these issues.
Panelists interacting with the audience at Automotive Logistics India Conference in Pune
Vinita Kumar, senior advisor for transport, Planning Commission addressing the conference