DMPQ: Recently infrastructure status was given to the logistics sector? Analyse the advantages and major hurdles. (economy)

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the need of the healthy and efficient logistics sector. India rank 35 out of 160 in the logistics performance index. ( This is quite low). Hence GOI recently granted infrastructure status to the logistics.

 

Major benefits attached by granting infra. Status  with the logistics sector are as follows:

• Availability of easy credits to the companies operating within these segments. Now long-term credit from banks and other Financial institutes can give credit to these companies.
• It will also help to attract foreign investment.
• More funds and capital will make sector more efficient and thus help to reduce per unit cost incurred in logistics. This will have cascading effect on improving competitiveness.
• It will also help to prevent the damages of Perishable items in the agriculture sector by having a healthy cold chain supply chain.

 

Major Impediments:

• Road Infra in bad shape.
• Banks lack of lending capacity. Facing NPA issues.
• Flight of capital due to Quantitative easing.