GST's role in reducing logistics cost

The GST has played a remarkable role in bringing down the country's logistics cost, Economic Survey on Monday said.

The One Nation, One Tax regime has ensured that trucks do not have to wait for hours on state borders, which has brought down the travel time by up to 30 per cent.

“This has reduced the logistics cost and increased the average distance trucks travel from 225 km before GST to 300-325 km,” the Economic Survey 2023-24 tabled in Parliament said.

This has been a great value, adding to the ease of doing business and the growth of manufacturing in the country, it added.

The National Council of Applied Economic Research (NCAER) study of December last year has shown that the logistics cost in the economy has declined 0.8 to 0.9 percentage points of GDP between FY14 and FY22.

India's position in the World Bank's Logistics Performance Index (LPI) rose from 44th place in 2018 to 38th in 2023 out of 139 countries. This improvement is attributed to reduced logistics costs and better trade facilitation.

With the introduction of cargo tracking, dwell time in the eastern port of Visakhapatnam came down from 32.4 days in 2015 to 5.3 days in 2019. Additionally, the country's position in international shipments climbed to 22 in 2023 from 44 in 2018 due to its modernisation and digitalisation efforts.

India moved up five places in infrastructure score and four places up to 48 in logistics competence and equality.

India aims to be in the top 25 countries on the LPI by 2030.