Slump in economy affecting transport sector

Transport sector which used be the fastest growing sector of the economy has now hit a speed breaker due to overall economic meltdown. The economy of our country is actually in doldrums. Even the jobs in transport sector are being affected in a big way. As demand is low, companies have resorted to downsizing. Employees have been laid off and this is a serious cause of concern. As transport industry is in grip of a slowdown, credit limit to transporters have been reduced as the Govt is scared that they might not be able to repay their loans. In the past the credit to truck transporters had grown from INR 90,400 crore to INR 1, 38,500 crore over a span of six years. But now the change is to negative and credit is declining. For transporters in India 2019 does not shape a good picture as far as their growth is concerned.

Impact on truck transporters

Transport services are bearing the brunt of economic meltdown in a huge way. The trucks are idle and are just left unused as the demand for transport of goods has plummeted in a big way. Basically, a slowdown in logistics is a very serious thing as this means that slowly and steadily economic hold up is leaving an adverse effect everywhere. The gross domestic product growth of our country fell to a huge low of 5.8% in January-March 2019. This fall was basically due to an environment of political uncertainty in the country.

People are now refraining from using transport services as demand for their goods has come down. Truck transporters are not been able to reduce freight prices due to rise in fuel prices otherwise they will be in a financial quagmire. Truck transporters see the biggest freight volumes out of all logistic segments. Volume of freight has fallen down in a big way. Rental rates have been brought to bare minimum so that things just keep moving.

What steps can Govt take to reduce slowdown of transport sector?

As per reports, rental rates for truckload began to fall in last November and this trend has been continuing in a big way. Govt should make efforts by offering subsidies or cut in fuel prices so that this economic slowdown is dealt with an iron hand. Higher fuel prices due to the rise of prices in international market is a big factor why there has been a slump in the transport sector. Even though overall economic regression is the main reason, the impact of other factors cannot be ignored. Govt should remove or atleast cut down road taxes and registration rate. This will ease the pressure on the transport sector as they will get temporary relief and this short span of relief will help them recover from things. A little helping hand can go long way in making lot of things right. Transport industry needs to be saved from onslaught of fall in demand, then only things will change for better in the economy.

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