Logistics Sub-Sector Land Transportation

UNIT 6.3: Identification of Corrupt Practices & Laws 
 
Unit Objectives 
At the end of this unit, one will be able to:
1.
Identify the corrupt practices in the logistics industry & create awareness. 
6.3.1. Corrupt Practices & Laws 
Corruption and associated comfort are one the primary reason of high logistics cost in India, as both 
industry and logistics companies preferred this mode of partnership to generate the income which 
does not come into the formal economy.
 
Reported cases involving Indian operations reveal the extensive use of third-party intermediaries. 
Typically, improper payments are disguised by creating fake documents, paying excessive 
commissions or margins, creating and parking slush funds with third parties, and making payments in 
cash. 
At the local level:
We have labour unions, recovery agents, brokers, illegal toll booths, illegal parking lots, and petrol 
pumps etc. which are all controlled by local politicians to generate black money. 
At a state level: 
We all have witnessed that there are flying squads doing rounds, the state police inaction, excise/tax 
officials & highway theft etc. all of which are controlled by local politicians. 
AT LOCAL LEVEL 
AT STATE LEVEL 
AT PORTS AND 
AIRPORTS 

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Participant Handbook 
114 
At Ports and Airports:
 
•
In 
CFS (Container Freight Station) 
operations, port/terminal operations, container 
movements, equipment rental, labour unions etc. all of which are controlled by the politicians 
and their network. 
•
Due to too much 
•
political involvement, the overall logistics costs increases manifold and makes the entire 
Logistics highly complex, which ultimately makes Indian produced goods uncompetitive in the 
international market.