Budget: A healthy kick start for logistics sector in 2017

Bearing in mind this economic situation, all eyes are now on the upcoming Union Budget, eagerly awaiting for announcements that bring some cheer. To realise the goal of a cashless economy, we anticipate some definitive SOPs and tax rebates for e-payments. Rationalising indirect taxes and charges levied for making e-payments and making it lucrative for corporate as well to operate digitally, could help realise the vision of financial inclusion.

The government has placed sufficient emphasis on development. 

Starting with GST, which is a milestone opportunity for the sector. It would lead to consolidation of warehouses, with logistics players realigning their supply chain to operate in a hub and spoke model. The single window clearance under GST would lead to free flow of goods across different states.

The GST tax model requires strong backend infrastructure for a unified automated system and the government should be ready with it.

The Central and State government need to work in tandem to ensure successful rollout on July 1, 2017. The success of GST lies in its implementation, with least possible business disruption, to help customers reap the benefits of operational and cost efficiencies. We are positive to get all the requisite support from the government.

Significant emphasis has been placed on infrastructure development with a slew of projects underway. In September last year, the Central Government has issued guidelines for the revival of the construction sector; Sagarmala project for port modernisation and port automation, development of multimodal logistics parks at 15 identified locations, smart cities project, dedicated freight corridors, Delhi Mumbai Industrial Corridor etc. The successful and timely completion of these projects would reduce logistics costs of companies. The budget may also see incentives and schemes to have private sector participation.

Year 2017 is still expected to be a tough year for the world economy. India has the potential to emerge as one of the few islands of growth, provided there is effective implementation of the vision and the programmes that have been repeatedly emphasised by Prime Minister Modi. The logistics sector has a very crucial role and there has to be both concerted and individual efforts from the various Ministries in the Central Government and the State Governments to support the sector to become more efficient and economical, with seamless cargo movement at reduced transaction costs.

We recommend the government to bring surface transport, warehousing and shipping under one umbrella. This will enable faster decision-making by ensuring better co-ordination among ministries and departments. 

The government should focus its attention on making the sector more competitive. Logistics is the backbone of the economy. The sector needs to be duly given an industry status. The industry status and an integrated policy for the logistics sector will bring more structure and ensure that matters are addressed properly and more effectively. 
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V Balaji is the CEO (contract logistics) at Avvashya CCI Logistics Pvt Ltd