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India Forward: Major ports see positive growth in efficiency due to government’s policies

Businesses run or should run on efficiency. From raw material to finished goods and till it reaches the hands of the ultimate consumer, efficiency plays an important role or rather can also say that inefficiency too plays an important role. At any point, if an activity is carried out in an “inefficient” manner, it adds to the time and cost. These costs then get added to the price of the product and ultimately recovered from the consumer. Money being a scarce resource, businesses always try to maximize efficiency thus thereby maximizing profits and providing same goods at cheaper prices.

Some of the inefficiences are caused due to government’s actions. For example, the ports and how they manage cargo containers could add a significant amount of time and cost to the price of the goods. Port’s are the lifelines for export-import trade. An estimate states that 90% by volume and 70% by value EXIM trade in India is managed via ports. Hence any inefficiency at this end will have devasting effects on the economy.

Port Capacity and Traffic Handled Nos

Year

Capacity (MTPA)

Traffic (MT)

2012-13

744.91

545.79

2013-14

800.52

555.49

2014-15

871.34

581.34

2015-16

965.36

606.37

2016-17

1065.83

648.40

The Government launched the Sagarmala Project which entails 142 projects with a total investment of Rs. 91,434 crore. Along with capacity addition, conscious efforts were taken to improve the efficiency of the ports. Manual forms were eliminated and online submission of forms was introduced, direct port delivery, installation of container scanners, RFID based automation and 100% cashless transactions are being done. Apart from this 100% FDI was allowed and a new Berthing Policy and Stevedoring Policy was implemented.

The policy decisions coupled with efficiency improvement measures and capital investment is showing tremendous results.

The major ports in India have recorded a growth of 5.12%.

Cargo handled by ports is at 343.26 million tonnes during the period April to September, 2018 . The number stood at 326.54 million tonnes handled during the corresponding period of previous year.

The highest growth was registered by Kamarajar Port (19.66%), then Cochin(11.51%), Paradip (11.12%), Haldia (10.07%) and Deendayal (10.03%)

Right mix of policy, investment and integrated planning is resulting in tremendous efficiency gain and capacity utilisation. Although these gains do not result in direct benefit to the consumers, it is pertinent to note that they play an important part in the entire supply chain and give indirect benefits to not just indviduals but the economy as well.

 

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Ashutosh Muglikar
Articles on Corporate Laws, Policy, Economics and Politics. Maverick. Lover of Ideas. Slayer of Hoaxes.

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