One sector that has shared its expectations with the Finance Minister is the logistics sector. Considering it a new sunrise sector that can help give India the desired manufacturing and consumption boost, the sector hopes for infrastructure status, which will help further propel its growth.
Anurag Gupta, Partner at Deloitte India, shares that given the country’s National Logistics Policy, which sets up a clear pathway to logistics reforms and transformation, “Timely execution and outcome-focused implementation are critical success factors going forward. While budgetary support for enabling capacity creation in the warehousing and logistics sector has been provided, this needs to be scaled up. Additionally, fast-tracking NLP initiatives like quality standardisation for the warehousing sector must be implemented in a timely manner.”
“Further initiatives requiring consideration include fast-tracking private sector participation with special incentives for PPPs in MMLP development, as well as concessions for land prices for industrial warehouses and logistics parks. This should be supported with additional financial and other incentives for tech-enabled automated warehouses.”
“Secondly, optimising the duty structure on steel and other ancillary inputs for the warehouse and logistics sector. Thirdly, boosting infrastructure capacity creation and enabling a modal shift to greener and more cost-efficient modes like rail. Modal mix optimisation in favor of rail is key for reducing overall logistics costs and increasing efficiency in the country. Lastly, a policy and budgetary push for the adoption of EVs in freight transportation, especially for intercity routes, would also help in greening the logistics ecosystem and boosting sustainability.”
Expressing similar sentiments, Raghav Singhal, Executive Director of Om Logistics, adds, “The logistics industry is looking forward to the upcoming budget with high expectations, particularly for more detailed and concrete measures. While the government’s initiatives like PM Gati Shakti and the National Logistics Policy are commendable, businesses are seeking clarity on their tangible impacts.”
“Companies focused on sustainable logistics are especially interested in specific financial support and waivers to aid in transitioning to greener practices. Clear communication about these policies will provide necessary transparency, helping MSME-based logistics players understand how to leverage these initiatives.” Singhal continued.
“By addressing these concerns, the government can ensure that the benefits of these policies reach a broader spectrum of logistics players, fostering industry-wide growth and innovation. This comprehensive approach will encourage more companies to actively participate in and benefit from the advancements in the logistics sector,” he added.
“As India aspires to become a $7 trillion economy, the logistics industry is set to play the role of a growth catalyst, ushering in a new era of economic progress. For that, the logistics industry requires consistency in policy, technology, and infrastructure-led reforms. It is extremely encouraging to note that the NDA government, in its third consecutive term, has emphasized continuity and stability in decision-making and policy measures, and we expect this intent to be reflected in the full budget,” said Ketan Kulkarni, Chief Growth Officer at Allcargo Group.
“The logistics industry is at the cusp of technology transformation and structural transition thanks to the launch of the National Logistics Policy and PM Gati Shakti National Master Plan. The foundation has been laid to further strengthen the logistics competitiveness of our country so that it becomes a key global manufacturing hub and investment destination. The full budget needs to continue with the infrastructure push to add momentum to the transformation-led growth. The logistics industry requires a holistic infrastructure development push to build a stronger distribution network and global value chain linkages,” he added.
“Along with infrastructure development, the budget should announce fiscal stimulus to boost the entrepreneurial ecosystem and create employment opportunities to drive consumption. As the country aims to become carbon neutral by 2070, the full budget should propose measures to increase e-mobility and renewable energy adoption. The logistics industry expects incentives and policy support to adopt sustainable practices to accelerate the country’s progress towards a green economy.”
“There should be policy continuity in developing economic railway corridor programs to boost rail freight share and reduce carbon emissions as well as enhance operational and cost efficiency. A dedicated focus on sustainability will help the sector adopt green practices, reducing its carbon footprint and aligning with global environmental standards. The logistics industry is geared up to contribute to the ‘Viksit Bharat @2047’ mission,” Kulkarni informed.
Samin Gupta, Director of Premier Roadlines, also adds, “The expectations of the logistics industry from Budget 2024-25 have primarily been on the lines of infrastructure and fine-tuning of policies. A step-up in infrastructure, especially with an enhanced outlay to the Ministry of Roads, Transport, and Highways, would be a game-changer for this sector. Better road connectivity and quality will help in transportation, being a vast time-and-cost saver, and would improve overall efficiency tremendously.”
“However, while the National Logistics Policy was a step in the right direction, loopholes are yet to be plugged. There is no clarity in its implementation, and the fragmentation in the industry has barely been touched upon. This is where the budget needs to provide resources for the creation of a single umbrella-like digital platform for all stakeholders related to logistics, standardisation of processes across states, and also offer incentives for the use of technology. Equally, bridging the skills gap by implementing focused training programs would further strengthen sector capabilities and competitiveness on the global platform.”
It remains to be seen how far these expectations are met and whether the sector gets some of these demands fulfilled in the upcoming budget.
Also read: Budget 2024: Govt may unveil new medical device policy to cut imports, promote ‘Make in India’
