GST has reduced logistics costs and improved India’s global ranking, says Economic Survey 2023-24.
The Economic Survey 2023-24 reveals significant improvements in India’s logistics sector due to the Goods and Services Tax (GST). The ‘One Nation, One Tax’ system has substantially reduced state border delays, cutting travel time by up to 30 percent.
As a result, trucks now average distances of 300-325 km, up from 225 km before GST. This advancement has decreased logistics costs and bolstered the ease of doing business and manufacturing growth in the country.
According to a December 2023 study by the National Council of Applied Economic Research (NCAER), logistics costs in India fell by 0.8 to 0.9 percentage points of GDP from FY14 to FY22. India’s World Bank Logistics Performance Index (LPI) ranking improved from 44th in 2018 to 38th in 2023. Enhanced cargo tracking has also reduced dwell time at Visakhapatnam port from 32.4 days in 2015 to 5.3 days in 2019. India aims to break into the top 25 LPI rankings by 2030.
