City On Wheels, #108 , Shenoy Sadan, 3rd Cross, 9th Main, Saraswatipuram, Mysore (2026)

28/09/2013

PE investment & logistics sector

Analyzing logistics industry from a financial perspective throws out a strategic perspective as to why the industry is not matured enough for hot M&A transactions. One of my research projects “Analyzing private equity investment opportunities in the logistics sector in India” has given some insights into this critical aspect.

s the research involved private equity investment angle, the public companies were not a part of the study. The approach was to divide the logistics sector into specific selected industries and analyzing them on various parameters. Below were the sub-segments that were analyzed.
Surface Transport / Cargo and warehouse providers
As known to everybody, this forms the bigger pie in the entire sector. Typically about 90% of the players in India belong to this family. Selection of healthy companies is a challenging task.
Findings:
This sector is slightly healthy in terms of percentage Net profits Vs Sales (Turn over) compared to the other sectors though there are some exceptions. The net profits average out to about 4%-5%.
The questions that pop up are:
a. Are the margins shrinking due to large number of players in this segment?
b. Lack of innovation such as bundling/consolidation or even fuel efficient trucks etc?
c. Infrastructure and amenities etc
d. Why is this segment not open minded for private equity?
e. How long would banks support this segment if the margins keep on decreasing?
f. Management education to the promoters necessary?
Another challenge in this segment is that the companies which are in RED are not open for private equity due to ownership issues. Most of the companies are not even ready to disclose the fact that they are not doing well and would like to get funded to turn around the business; the reason being they do not like a share holder controlling his business. The unfortunate part is that the transporter doesn’t look from the angle of improving and expanding his business.
From the outside it looks like investments, M&A can be a easy go here, but would be an exigent task because the external factors such as the economies/efficiencies etc play an important role in this rather than the intra company issues.
Couriers and parcel service
A smaller number of companies comprise this segment compared to the cargo transport. However, there are only few well known private limited companies that are either doing too well or the other way round.
Findings:
This sector is a complete monopoly market dominated by few big companies that enjoy major market share. This results in the biggies gaining the economies of scale through achieving the learning curve. Due to this the smaller companies are bleeding and not very healthy in terms of percentage Net profits Vs Sales (Turn over). The net profits considering only the top 4-5 larger companies average out to about 4%-5%. The questions that pop up are similar to that of Transport / cargo segment.
Already being a oligopoly market, investments & M&A activities would be on the slower side in this segment.
Packers and movers –
Personnel baggage
Though packers and movers are typically not considered as a part of logistics fraternity, this was chosen as they make an interesting sub-segment that includes multi modal moves such as road, train and air including special packaging and handling. Again, there are umpteen number of players in this area but completely unorganized and region-wise based. Not many companies have made a name that can be called as a one-stop solution for all personnel moves.
Findings:
This is a highly customized business and hence the profit margins have a huge standard deviation. Most of the companies which work in this space are those that have regional strengths. Further, insurance plays a very important role as this is a huge cost to the packers and movers. In case of damage/theft/pilferage, it is the packer’s insurance premium that is going to burn his pocket.
But the basic question here is: has this segment gained importance in India? Do people understand the value this segment gives? This segment runs mostly on sentimental values. Similar to the Surface transport / cargo business, investments & M&A would be a challenge in this sector as not many companies have tested waters in this area!
Other points:
1. The total sample size considered was about 70 companies that form all the above segments.
2. Database such as Capitaline was used.
3. Financials were analyzed using reports from Crisil, Fitch and Care.

(The author is presently preparing a comprehensive report on investment trends in Indian Logistics Business)

28/09/2013

Why Make a Career in Logistics?

“Logistics is the hottest career out there. It links every functional area in a corporation and its success.”
Logistics industry in India is in its developing stage.
According to the estimates of 2011, the global logistics market is valued at USD 3.43 trillion. By comparison the Indian logistics industry is only USD 125 billion. The logistics or the services sector contributes about 10 percent to the GDP in India; there is a large scope for improvement.
The logistics costs in India are 14% of GDP, while in US it is merely 8.7%.
There is need to foster growth in this sector by creating awareness about this sector in the student community. The logistics sector employs 45 million people out of a total employable population of nearly 500 million. An effort needs to be made in this direction by bringing together top level professionals from across the country and aspiring management students who foresee their career in the logistics sector.
It is important to focus on key issues of Logistics like:-
Warehousing
Cold – Chain Management
E – Logistics
Green Logistics
Supply Chain Management
Reverse Logistics
Manufacturing, transport and courier industries are looking for committed people with innovative ideas and solutions for addressing these issues to reduce cost and improve efficiency. Besides, Indian micro and small scale operations are being taken by the storm of globalization and stiff competition from foreign players. There is great dearth of trained manpower to carry out these operations in the most efficient manner.
What is Logistics and Supply Chain Management?
Supply chains encompass the companies and the business activities needed to design, make, deliver and use a product. Businesses today depend on their supply chains to provide them with what they need to survive and thrive. Every business fits into one or more supply chains and has a role to play. Supply chains consist of all the stages involved in fulfilling a customer request. It not only includes manufacturer and suppliers, but also transporters, warehouses, retailers, and the customers themselves.
“Supply chain management is the coordination of production, inventory, location and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.”
- Hugos Michael.
There is a difference between the concept of supply chain management and logistics.
Logistics is the linkage of all activities, from raw material procurement to production, transportation and distribution, maintenance and inventory, within the boundaries of a single organization. Supply chains refer to a network of companies that work together and coordinate their action to deliver a product to the market.
Businesses sometimes face issues like planning and assessment, procurement and fleet management, warehousing and tracking that need to be addressed in a professional manner. We need trained manpower to look into all these issues.
Logistics, therefore, has a huge impact on the domestic and global economy. Now a days it has become critical for human survival. It greatly impacts our quality of life.
Where are the Jobs?
The logistics industry provides great opportunity of employment to students pursuing different streams of education.
A candidate can look for placement as analyst, consultant, customer service manager, international logistics manager, logistics engineer, logistics manager, logistics services sales process, logistics software manager, materials manager, production manager, purchasing manager, supply chain manager, systems support manager, transportation manager, vendor manager, inventory coordinator, and warehouse operation manager.
To achieve this goal, there is need to do effective planning. The students must focus on:-
Taking advantage of on-campus resources and seek help from faculty specializing in Logistics & Supply Chain Management.
Build a strong grade point by participating in leadership roles on the college campus.
Obtain internship and relevant experience to make an impressive bio-data.
Students can also opt for specialized courses on Logistics and Supply Chain Management.
This is the right time to enter the logistics industry. Businesses need logisticians to bring about customer satisfaction at least cost and be able to compete and thrive in this era of globalization. It is a growing industry and provides great opportunity for advancement. There is scope of international exposure. Due to the wide application of IT in logistics, it does not matter where you live, the logistics business can be easily managed. Besides, variety makes it an interesting career option.

11/09/2013

Effective Reverse Logistics Management Is Crucial for Successful Ecommerce

When one thinks of ecommerce, one often focuses on the cycle that culminates in delivering goods to a customer. But there is an entire leg of the ecommerce supply chain that comes into action after goods are delivered. Enter the world of "reverse logistics."

Why Reverse Logistics?
There are several reasons that make reverse logistics inevitable. Here are some of the most common:
Returns
Some goods are invariably returned to the seller. This is true in physical retail as well as in an ecommerce setup.

Mis-delivered or Undelivered Goods
If you are an ecommerce player selling virtual goods that can be delivered electronically, you might be blissfully ignorant of the nightmare of mis-delivered or undelivered goods. But physical goods not reaching the desired destination is a common problem that ecommerce merchants have to grapple with.

Damaged Goods
Ordering a brand new iPad and receiving one that has a cracked body or a scratched screen is unacceptable. But it is bound to happen sometimes. Such damaged goods get returned by the customer or the logistics provider.

Malfunctioning Goods
"I received the pottery wheel, but it refuses to spin" is the last thing a successful ecommerce business wants to hear. But since 100% error-free performance is impossible, there will be occasions when goods will not work. This is not exclusive to ecommerce; it happens in physical retail too.

But a customer who physically collects goods at a retail store finds it logical to travel back to the store to return the malfunctioning goods. In ecommerce, the customer would prefer a pickup from her location, or at worst an option to mail in the malfunctioning product.

Exchange Programs
"Give us your old and obsolete gizmo and get the latest model" is a slogan that finds appeal with many. Several customers refuse to upgrade, as they are unwilling to trash a perfectly fine, albeit old, product.

Exchange offers are compelling for the customer, but they create the additional process of collection of goods for the ecommerce business.

Why Reverse Logistics Is Important
If you have read the above list closely, you know that there is no escaping reverse logistics. But I would like you to think of reverse logistics as more than merely a necessary evil. Here are some of the reasons why reverse logistics is so important to an ecommerce business:

As a Strategic Advantage
Though the ecommerce enterprise is quite complex, customers have only two clear windows into the business -- the website and order fulfillment. If either of those two is found lacking, the customer will lose the confidence necessary to make a purchase. Reverse logistics is an important part of order fulfillment. Hence a strong reverse logistics setup can be a strategic advantage to an ecommerce business.

Customer Retention
In much the same way as reverse logistics can act as a strategic advantage, it can also help in customer retention. A customer who is able to return or exchange with little pain is likely to be a satisfied customer. And a satisfied customer is likely to be a customer for a long time.

Regulation Compliance
When reverse logistics results in damaged goods, it leads to waste. And there are regulations relating to waste, especially e-waste. This proves that reverse logistics is not just about customer delight; it has to do with aligning oneself within the legal environment of business.

Profitability Through Asset Recovery
If your ecommerce business does not have a sound reverse logistics plan, it is probably losing out on the golden opportunity to profit from the piles of goods that fell out of the supply chain. In an era of wafer thin ecommerce margins, effective reverse logistics could be the difference between being profitable or not.

Shareholder Value
As a manager of an ecommerce business, you know that it is your fiduciary responsibility to deliver value to shareholders. So you need to cash in on the multiple opportunities that reverse logistics provides.

17/07/2013

"The Indian e-Commerce industry is set to grow more than five-fold to its current size, the fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012-16." This is exciting news for logistics companies as the growth in e-Commerce sector in India will directly propel the demands for timely, safely and efficient delivery of the shipments, consignments and packages to their respective destinations. As e-Commerce will further pe*****te the tier-2 and tier-3 cities, it will increase the demand for more efficient expansion of a logistics company’s infrastructure and capabilities. This is certainly one of the major challenges for all logistics companies in India.

17/07/2013

Logistics and Customer Support:

Logistics and Customer Support are the final stage of the buying process and Embitel completes the full circle of services in its endeavour to provide end-to-end eCommerce services. Logistics and Customer Support form the back bone for successfully managing eCommerce and e-Retail services.

Logistics: Embitel understands the importance of timely co-ordination with logistics companies for order fulfillment and deliveries. Embitel can put in place the right systems & procedures to help you handle these activities. We also have tie-ups with reliable logistics partners.

Customer support: Embitel’s customer centric approach attaches the right level of importance to customer support features to facilitate handling of queries and requests and facilitate order-related information flow and interaction.

Logistics and Customer Support services:
Customer Support/ Help desk 24/7, 8/5
E-Mail support
Chat support
Telephone support

Logistic Handling
In coordination with our Logistics partners
Domestic deliveries covering Metro, A & B tier cities
International deliveries

17/07/2013

Why most of India's biggest ecommerce companies want to become third-party marketplaces. And why a few are choosing to sit it out, Vijay Sales, a privately-held electronics retail chain that started out from Mumbai in 1967, is an unlikely poster child for the next phase of ecommerce in India. Most Mumbaikars swear by its product range and deep discounts. "But who walks into stores anymore?" most armchair ecommerce diehards are likely to retort. They may even view Vijay Sales, with its 50-odd stores and over Rs 1,500 crore annual revenue, as a ripe fruit waiting to be digitally disrupted by the likes of Flipkart. But over the next few months, many leading ecommerce companies, including possibly Flipkart itself, are likely to be courting Vijay Sales instead of figuring out how to steal its sales.

"Over the last 12-18 months there has been a maturing of suppliers, from electronics retailers like Vijay Sales to brands like Samsung and Benetton. They are now willing to invest more time and effort so that a product that was earlier going from Vijay Sales to Flipkart and then to the consumer, can now go directly to the consumer," says Alok Mittal, managing director of venture capital firm Canaan India.

17/07/2013

Logistics and fulfillment are the largest challenges of them all in India, with more than half of all online retail sales being done using cash on delivery (COD). While COD is essential in a nascent eCommerce market, it can have a large negative impact on business margins. This is exacerbated in a nascent market where consumers are testing this new medium of ordering goods, as the return rates can be quite high. In India, reportedly, the return rates can vary from 5% to more than 25%, depending on the category, the demographics of the online buyers, and their online tenure (experience with the Internet).

Given the challenges of high return rates and fraud, especially for COD goods, Flipkart recently announced that it was not going to be fulfilling orders of more than Rs 10,000 (approximately $175) in certain areas of Uttar Pradesh, a state in India. It has not publicly admitted whether this is due to returns or simply fraud, but a quick gut check indicates the following:

This high average order value is generally possible when ordering consumer electronics and mobile phones, which generally have low-single-digit margins for the retailer.

Consumer electronics and mobile phones are popular with a younger population.
Internet connectivity in the state of Uttar Pradesh is probably lower compared with metropolitan markets in India, given its lower state GDP/capita.

The younger age profile of online buyers and the fact that Internet pe*******on in Uttar Pradesh has been lower in the past indicates that the online tenure of these buyers is also lower compared with metropolitan markets. And, in a 2011 report, Uttar Pradesh had the highest number of registered police complaints.

16/07/2013

India’s eCommerce Woes: Managing Logistics Challenges In India:
Coca-Cola recently announced that it is jumping into the red-hot Indian online retail arena by selling directly to consumers and small businesses, a first for a FMCG (CPG) company in India. While the Indian online retail story is still being written and Forrester is bullish about the long-term prospects for this channel, the immediate challenges need to be managed effectively.

Logistics and fulfillment are the largest challenges of them all in India, with more than half of all online retail sales being done using cash on delivery (COD). While COD is essential in a nascent eCommerce market, it can have a large negative impact on business margins. This is exacerbated in a nascent market where consumers are testing this new medium of ordering goods, as the return rates can be quite high. In India, reportedly, the return rates can vary from 5% to more than 25%, depending on the category, the demographics of the online buyers, and their online tenure (experience with the Internet).

Given the challenges of high return rates and fraud, especially for COD goods, Flipkart recently announced that it was not going to be fulfilling orders of more than Rs 10,000 (approximately $175) in certain areas of Uttar Pradesh, a state in India. It has not publicly admitted whether this is due to returns or simply fraud, but a quick gut check indicates the following:

This high average order value is generally possible when ordering consumer electronics and mobile phones, which generally have low-single-digit margins for the retailer.
Consumer electronics and mobile phones are popular with a younger population.
Internet connectivity in the state of Uttar Pradesh is probably lower compared with metropolitan markets in India, given its lower state GDP/capita.
The younger age profile of online buyers and the fact that Internet pe*******on in Uttar Pradesh has been lower in the past indicates that the online tenure of these buyers is also lower compared with metropolitan markets.
And, in a 2011 report, Uttar Pradesh had the highest number of registered police complaints.

I believe Flipkart’s decision to stop delivering goods worth more than Rs. 10,000 in certain areas of India is the right strategy for Flipkart, as it looks to manage this challenge while ramping up its top-line (revenue) growth.

16/07/2013

E-commerce logistics has grown only a few inches: Sanjiv Kathuria, Country Head, Dotzot-
For ecommerce players in the country, logistics has been a major pain. Mass online retailers such as Flipkart and Jabong have their own logistics divisions. However, smaller companies struggle with multiple logistics providers.

Large logistics companies such as Bluedart, FedEx, Gati etc have had their dedicated services for online retailers. In addition, we have also seen rise of ecommerce focused logistic companies such as Chhotu, Mudita, unicommerce and Delhivery .

Latest to launch end to end logistics and warehousing service is DTDC’s Dotzot. To understand more about Dotzot’s services, entry timing and status quo of ecommerce logistics in India, NextBigWhat spoke to Sanjiv Kathuria, Country head Dotzot. Edited excerpts of the interaction:

DTDC started now with Dotzot. What opportunities do you see?

If we look at logistic scenario for ecommerce in India – it has improved only few inches. Everybody talks about focused approach of mainstream logistic companies, but the real truth is that big logistic companies in India ships around 6-7 lakhs shipments everyday, out of which barely 2-3% orders (10 to 15K) are from ecommerce. So, how can logistic players focus on ecommerce? In terms of opportunities, well I said that space is in nascent stage and so is the opportunity.

Don’t you think DTDC is bit late in setting up dedicated service for ecommerce?

We believe ecommerce logistics is in very nascent stage and our entry timing is perfect. Dotzot’s entry is not late at all, currently we are scratching the potential of logistics in ecommerce. We are born for ecommerce companies, and will service them only. We endeavored not to ship anything out of ecommerce via Dotzot, and that implies our focus for the segment.

Tell us about Dotzot’s offering for online retailers in detail. Does Dotzot facilitate drop and reverse shipping?

Currently, we offer 6 services including Dotzot Express, Dotzot Economy, premium, returns and exchanges Collect on Delivery (COD) and warehousing.

With Dotzot Express feature, we offer fast, reliable, pan India door-to-door service across 8000+ pin codes spread over 2300 cities/towns. Importantly, Dotzot extends three delivery attempts sans any surcharge. On other hand, Dotzot Economy a slower and value for money service meant for larger/heavy parcels weighing more than 10 kg. The three delivery attempts without surcharge also available with the plan.

Through Dotzot’s return and exchanges service etailers can have flexible return and exchange programs that are bundled with DotZot Express and Economy services.

With collection on Delivery (CoD) service, we solve the biggest pain of delay payment or struck cash flow(working capital). Our systems are designed to cater to this complexity, we collect value of the invoice at the time of delivery and remit it immediately by RTGS/ NEFT.

On warehousing front, Dotzot solution aims to optimize inventory, storage space, labor costs and time. We store inventory, pick and ship etailer’s product where and when they want it.

It is basically on demand service, which manages etailer’s National Distribution Centre(NDC) or smaller Forward Stock Location ( FSl) to make their deliveries faster.

What is the pricing structure across various offerings under Dotzot’s umbrella? Please elaborate.

Pricing depends on various factors such as volume, weight, geography and nature of the shipments. We have different pricing plans for metros, tier 2 and 3 cities.

12/07/2013

Indian Budget 2013 and Logistics Industry

Logistics Industry related Budget provisions

a) Govt has decided to constitute a road authority for the road sector.

b) 3000 kms of road project to be awarded in the first six months of 2013

c) Two new major ports will be established in Sagar, West Bengal and in Andhra Pradesh to add 100 million tonnes of capacity. In addition, a new outer harbour will be developed in the VOC port at Thoothukkudi, Tamil Nadu through PPP at an estimated cost of `7,500 crore. When completed, this will add 42 million tonnes of capacity.

d) Five inland waterways have been declared as national waterways. The Minister of Water Resources will move a Bill in Parliament to declare the Lakhipur – Bhanga stretch of river Barak in Assam as the sixth national waterway. Preparatory work is underway to build a grid connecting waterways, roads and ports. The 12th Plan has an adequate outlay for capital works, including dredging, on the national waterways. The objective is to choose barge operators, through competitive bidding, to transport bulk cargo on the national waterways. The first transport contract has been awarded in West Bengal from Haldia to Farakka.

e) While every sector can absorb new investment, it is the infrastructure sector that needs large volumes of investment. The 12th Plan projects an investment of USD 1 trillion or `55,00,000 crore in infrastructure. The Plan envisages that the private sector will share 47 percent of the investment. Besides, we need new and innovative instruments to mobilise funds for this order of investment. Government has taken or will take the following measures to increase investment in infrastructure:

a. Infrastructure Debt Funds (IDF) will be encouraged. These funds will raise resources and, through take-out finance, credit enhancement and other innovative means, provide long-term low-cost debt for infrastructure projects. Four IDFs have been registered with SEBI so far and two of them were launched in the month of February,2013.

b.India Infrastructure Finance Corporation Ltd (IIFCL), in partnership with the Asian Development Bank, will offer credit enhancement to infrastructure companies that wish to access the bond market to tap long term funds.

c.In the last two years, a number of institutions were allowed to issue tax free bonds. They raised `30,000 crore in 2011-12 and are expected to raise about `25,000 crore in 2012-13. I propose to allow some institutions to issue tax free bonds in 2013-14, strictly based on need and capacity to raise money in the market, upto a total sum of `50,000 crore.

d.Multilateral Development Banks are keen to assist in efforts to promote regional connectivity. Combining the ‘Look East’ policy and the interests of the North Eastern States, I propose to seek the assistance of the World Bank and the Asian Development Bank to build roads in the North Eastern States and connect them to Myanmar.

e.NABARD operates the Rural Infrastructure Development Fund (RIDF). RIDF has successfully utilised 18 tranches so far. I propose to raise thecorpus of RIDF-XIX in 2013-14 to `20,000 crore.Pursuant to the announcement made last year, a sum of `5000 crore will be made available to NABARD to finance construction of warehouses, godowns, silos and cold storage units designed to store agricultural produce, both in the public and the private sectors. This window will also finance, through the State Governments, construction of godowns by panchayats to enable farmers to store their produce.

f.The Finance Bill 2013-14 proposes reduction of tax on interest in respect of investment made through a designated bank account in Rupee dominated long term infrastructure bond from 20 percent to 5 percent.

g.The Finance Bill 2013 proposes to provide parity in taxation between an IDF-Mutual Fund that distributes income and an IDF-NBFC that pays interest when the payment is made to a non-resident. The rate of tax on such distributed income or interest will be 5 percent. (IDF – means Infrastructure Development Fund). The rate of tax on interest paid to non-resident investors was reduced last year from 20 per cent to 5 per cent.

12/07/2013

CHALLENGES FACED IN LOGISTICS SECTOR IN INDIA :

The road transport in India as emerged as a dominant part of the transport system in India, it has come to occupy a pivotal position in the overall transport system in India. The sector is growing at the rate of 10% per annum.
Several factors are helping the growth of logistics industry in India over the decade that includes changing tax system, rapid growth in industries such as automobile, pharmaceuticals, FMCG and retail. However, major sectors that are investing huge amounts in logistics industry are aviation, metal & mining and consumer durables. With increasing competition and cost, focus on outsourcing, entry of foreign players is having positive impact on the industry. Three major contributors for the growth of the logistic industry are: emergence of organized retail, increase in foreign trade and India becoming soon the manufacturing hub.

The Economic liberalization and the relaxed FDI norms have been a tremendous help in the growth of the sector. Other factors that have helped are augmentation of retail, agriculture, pharmaceutical, automobile and FMCG sector. The introduction of Value Added Tax (VAT) and the proposed introduction of a singular Goods and Services Tax (GST) are expected to significantly reduce the number of warehouses manufacturers are required to maintain in different states, thereby resulting in a substantial increase in demand for integrated logistics solutions.
Infrastructure is one of the biggest challenges faced by the Indian logistics sector and has been a major deterrent to its growth. Infrastructural problems like bad road conditions, poor connectivity, inadequate air and sea port capacities and lack of development of modes of transports like railways and alternates like inland water transport and domestic aviation have been constant irritants. Due to the infrastructural bottlenecks costs per transaction in Indian logistics sector is very much high compared to those in the developed markets. Less economy of scale due to high fragmentation of industry, lack of skilled labor and manpower are also one of the major challenges for the logistic sector.

Indian subcontinent faces different challenges vis-a-vis developed nations. In foreign countries the problem is demand; in India, demand management has been a great challenge. India still has a long way to go in terms of best practices. Maturity level of most of the companies on demand driven value network is low. DDVN is essentially about being customer centric.

Apart from the above-mentioned points, the key challenge is the lack of human resources followed by infrastructure in terms of logistics, power, and water.

The other challenge which exists in a vast country like India is that the customer base is diverse and widely distributed. The point I am making is that the real growth which will occur in India is from rural areas and remote locations. For companies to win over the Indian market which is huge, they need to have right end-to-end supply chain strategies in place, covering network strategy, proper human resources, and infrastructure. The other key challenge is volatile demand, needs and preferences consumers, and customers are changing rapidly, hence creating uncertainty in the demand patterns.

The transportation market in India is expected to continue offering significant opportunities to all concerned stakeholders. However, for the sector to reach its full potential, the timing and economics would depend on how the various drivers and inhibitors evolve in future. While the quality of road infrastructure is certainly likely to improve, the pace of infrastructure development is critical to minimize losses, both economic and environmental. In particular, delays in meeting project timelines should be minimized, given that only around 52 percent (10.39 km as against the target 20 km in 2011–12) of the daily target of average road length to be constructed has been met. However, not only has the demand for road connectivity been rising, focus on improving basic road infrastructure as well as technology adoption has also increased in recent years. The number of expressways and highways has increased; many roads have been widened; electronic toll collection is becoming increasingly common; the ‘green channel’ concept is gaining ground, and inter-state check posts are becoming automated, with Gujarat serving as an example.

In terms of overall business outlook, India has an opportunity; it’s just that after the downturn, in line with the global markets, the emerging markets like India and China are also getting stabilized at a new normal which will be slightly at the lower level vis-à-vis what the country used to grow at. Comparing India with other emerging markets, the per capita GDP is low but there is a lot of potential.

City On Wheels

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