India should invest more than 8.5 per cent of its Gross Domestic Product (GDP) in infrastructure development to achieve a consistently high growth rate over the next few years, said Rakesh Mohan, Chairman, National Transport Development Policy Committee, on Wednesday.
Delivering the inaugural address at the Auto SCM 2010 ‘Logistics as a key enabler to make India a global hub', organised by the Confederation of Indian Industry (CII), he said “the Indian economy had achieved a growth rate of six per cent for over 30 years. We cannot achieve or sustain the growth for over 30 years, without something happening. If India and China markets are not affected by the global crisis, then it is not a global crisis.”
Dr. Mohan said that to achieve an average growth of 8.5 per cent in the next five years, India need to invest more than 8.5 per cent of its GDP in infrastructure development. India should invest at least 10 per cent of its GDP to achieve a big leap in its transport infrastructure in the next 10 years.
He also said that huge investments were made in Indian infrastructure sector only when it got clogged and not in advance. In a resource scarce country, one should be careful. He also asked the Indian Railway to adopt a different approach to reverse the trend in the loss of share from freight and passenger traffic.
In his welcome address, R. Dinesh, Event Chairman, Auto SCM 2010 said “Supply chain can play not just an enabling role but a much stronger role to make India a global hub. India is already the hub for small cars, auto components and fuel components. Now, we have to make it an after-market warehousing hub for South East Asian market. Can we find an India way to manage supply chain better (in terms of efficiency, cost and value as pure drivers to go forward)?” he asked.
Warehouse Certification
To mark the occasion, CII Institute of Logistics launched Warehouse Certification (Warex) that would assess and certify the overall functions of the warehouse under four categories such as platinum, gold, silver and bronze. Besides, it would enable service providers to understand the current level and upgrade to the next level and also help end users to choose their appropriate collaborative partner that would suit their supply chain design.
Dr. Mohan also released McKinsey report ‘Transforming the nation's logistics infrastructure'. The report calls for introduction of four major shifts. If India fails to achieve this, the waste caused by poor logistics infrastructure would increase from the current $45 billion to $140 billion in 2020. If tackled in an integrated and co-ordinated manner, the waste can be reduced by half and India's transport fuel requirement reduced by 15 to 20 per cent.
Rajat Gupta, McKinsey Director and author of the report said that we have to build the right network and ensure flows on the right mode; create enablers to maximise the efficient use of the network; extract more from existing assets and allocate more investment to rail and reallocate within roads and rail.
