Understanding the intricacies of the logistics sector in India can often be overwhelming. Despite its contribution to the country’s economic growth, many neglect its structural fragmentation. This is because, in recent times, people have come to perceive the sector merely as an outcome of infrastructure and technology. However, it is important to understand that the logistics sector on its own, without contextualising the human resource element, leaves us with an incomplete understanding of the sector.

Earlier, the logistics sector would often be looked at under the wider aspects of infrastructure and technology. However, the recent institutionalisation of a Logistics Division under the DPIIT (Department for Promotion of Industry and Internal Trade) has provided an independent focus on the sector now. Simply put, the sector is a combination of physical infrastructure, technological adoption and human capacity at once interlinked with and interdependent of each other.

Human capacities here would mean the various components of human interaction that shape the sector’s economic value. From the managerial jobs to even the core occupation of on-ground executives, the sector has always gone higher and higher in terms of generating employment.

This is because, over the past few years, there have been considerable transitions in the economy. From import substitution to liberal economic standards, labour-driven markets to technology driven ones, from limited infrastructure to multimodal infrastructure, the Indian economy of the 21st century is vastly different from that of the pre-liberalisation era.

A pre-1991 India would find the public sector unit largely driving national logistics, with the talent acquisition policies of “catching and training the young.” Therefore, adapting to technological developments, bridging the gap between employment and employability, and upholding working standards were easier under direct government supervision.

However, its transition into a liberal economy, post 1991, has given way to private enterprises that often choose employees who have been independently trained either through state or state-supported institutions. Such a transition has also found its way into the aspirations of the generation that now chooses lucrative private sector options rather than its public sector counterparts.

HR development

However, there is a reluctance within the industry to invest in the sector’s human development or enhance its social value. A number of underlying issues such as intense work environments, low compensation and minimal welfare benefits are yet to be formally addressed within the informal segments of the sector. Such issues not only discourage creating career aspirations but also stereotype certain roles into society. For instance, many might choose to stay unemployed rather than take up the role of truck driver .

Secondly, there often exists a perception about the sector’s low employment security. This comes from the industry’s preference to replace the experienced workforce with younger employees who can often be sourced for a lower wage. Therefore, instead of upskilling and enhancing existing wages, they would rather choose to replace the same with a younger employee without the adequate skills or professional experience. However, many a time enterprises find it difficult to source the right candidate without adequate investments in organisational training, skilling, or remuneration.

Lastly, driving necessary changes have never taken a stronger pace since many of our sectoral enterprises are yet to create a structural framework that would ensure adequate resource allocation towards workforce development.

Every enterprise, whether in the public or private sector, should start devising policy benchmarks that can help mitigate these gaps. Besides restructuring employment standards, the sector needs to be incentivised to help address the issues over social values into the various jobs in the sector. Based on their capacity, several long-term welfare components such as overtime allowances, outstation amenities, healthcare benefits and family insurances could be brought in for the existing workforce.

Once the tone is set for an added value in the sector, the industry can then move to devise ways that would help bridge the gap between the employable workforce available and their actual employment. In terms of taking responsibility to skill and re-skill, the government has already been working independently through various policy initiatives such as the PM-Kaushal Vikas Yojana (PMKVY).

Collaborative solutions

However, any enterprise in the sector can parallelly initiate such reforms by devising collaborative solutions. One of them could be to create independent skill councils that take periodic reviews over upcoming skill requirements. Inspirations could be taken from many international frameworks such as the UK’s 2004 Skill Council initiative of employers in this regard. Another could be to collaborate with state or state supported institutions that would be able to give students a wider perspective of the logistics sector.

A relevant example would be of Germany that has been able to devise a Dual Vocational Education and Training Programme that inculcates industry training in academic curriculum. By experiencing the logistics sector firsthand, students get a wider perspective over the many forms of employment and the industry is also able to source candidates that have been trained specifically to the sector, thereby ensuring a connection between employability and actual employment.

The enterprises, more so in the private sector, should now realise that they have a greater role to play in bringing about efficiency into India’s logistics sector. Adequate resource allocation for development of human resource and their optimal utilisation rather than a single-minded emphasis on efficiency will enable the logistics sector contribute much towards an inclusive economic growth.

The writer is Joint Secretary, Logistics Division, Ministry of Commerce and Industry

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