FE Editorial: Free movement of goods

Written by The Financial Express | Updated: Apr 6 2010, 00:48am hrs
The plan to introduce a more liberal national permit system for truckers to ease the inter-state movement of goods from the next month hasnt come too soon. This will help accelerate the flow of freight and perhaps make a dent on food inflation levels. This step will ensure greater flexibility in the overall national trucking fleet, which is now saddled with national permits that only allow them to operate in a maximum of four contiguous states, including the home state. Though the annual permit costs will now be trebled, the gains in market access would ensure that the truckers are more than adequately compensated. But the new national permit rules will ease only one hurdle that hinders truckers who usually have to tackle at least seven different agencies to facilitate the smooth movement of goods. These include state tax agencies, regional transport officer, excise officials, regulated market committees, civil supplies agencies, forest officials and the department of geology and mining. Though some states have come up with single-point check posts to ensure simultaneous checks at one common point, the majority of the truckers still have to obtain clearances at different points, causing undue delays that push up freight costs.

Taking full advantage of superior quality roads and higher speeds on the newly built national highways would require that the number of agencies monitoring the movement of trucksand, therefore, delays in inter-state movementare reduced to the maximum extent possible. Expert estimates, in fact, show that the cost of delays due to the existence of various check posts was around Rs 4,300 crore in 2004 and this will go up to as much as Rs 60,168 crore by 2017. But it is important to recognise that it is not simply trucking regulations alone that lead to delays and cost escalations but also the policy regimes that regulate movement of different productssome of which are both commodity specific and some location specificvarying across different freight categories like food products, livestock, forest produce, minerals and manufactured goods. This makes the monitoring by the different agencies rather inevitable. Eliminating this excessively large burden would require a massive rework of the policies that regulate both the movement of transport vehicles and also products, including various laws like the essential commodities act, the forest produce act and the mining and mineral development act.