Budget 2023: Logistics sector needs focus, roadmap for sustainable growth required, say experts

Budget 2023 expectations: The logistics sector expects the upcoming Union Budget to not only create a roadmap for sustainable growth but also incentivise the industry to adopt sustainable practices. Industry mavens believe that the upcoming Budget should continue to prioritise the improvement of logistics infrastructure across roads, warehouses, and ports among others. 

Apart from this, industry veterans have also sought the implementation of zero-rating of GST for all international transportation services. FedEx Express Senior V-P Middle Eastern Subcontinent and Africa (MEISA) Operations Kami Viswanathan was quoted as saying by news agency PTI: “Most of the international GST/VAT legislations ‘zero-rate’ international freight transportation services. This would facilitate trade and align India with international tax practices as well as reduce logistics costs.”

Mahindra Logistics CFO Yogesh Patel is of the opinion that the government is also likely to consider concessions on electric vehicles (EV) infrastructure like charging stations in addition to concessions on new EVs to expedite the adoption of electric vehicles for commercial purposes and speed up last-mile deliveries. 

V-Trans India Chairman and Group Managing Director Mahendra Shah stated that the Union Budget should be focused on lowering logistics costs by implementing the National Logistics Policy. The National Logistics Policy (NLP) announced by the Central government is focused on improving the efficiency and transparency of operations.

Shah said: “The momentum of growth that our country has come to a way post the global pandemic cannot be undermined, the strengthening of the digital ecosystem with various initiatives under NLP, for faster communication and work, enhanced visibility, and transparency is very promising. To catalyze the master plan announced in the previous financial budget, NLP was much awaited by the industry and heard quite applause. We expect this budget to focus on lowering the costs of the logistics industry, especially by implementing the NLP that was launched in 2022, and look forward to seeing some tangible benefits to the industry being passed.”

He further said that the government should also look at offering investments in infrastructure and technology, tax benefits, creating employment opportunities, enhance or introduce rewards for building green infrastructure and practicing sustainability vis-a-vis the logistics sector.

He said: “In the impending Budget, the Finance Minister can address the challenges faced by the logistics sector in several ways and provide a steadiness between the economic growth priorities and inflation concerns, in an all-encompassing manner. Investments in infrastructure and technology can be given some motivation by offering tax benefits, it will on hand make the operations more effective and bring down the cost, on the other, it will also create employment opportunities. Also, to motivate the logistics players, the government can enhance or introduce rewards for building green infrastructure and practicing sustainable initiative”.

Allcargo Logistics CEO Suresh Kumar R said that policies such as the National Logistics Policy (NLP), Open Network Digital Commerce (ONDC), and PM Gati Shakti recognise the importance of the logistics sector in realising India’s growth goals and ambitions globally. He added that the COVID-19 disruption and realisation of the need for manufacturing alternatives present a great opportunity.

Suresh Kumar noted: “National Logistics Policy, Open Network Digital Commerce, and the PM Gati Shakti are powerful programmes that recognise the importance of the logistics sector in realising India’s growth goals and ambitions on the world stage. The COVID disruption and increased realisation about the need for alternatives for manufacturing present a great opportunity for India.”

He further said that this is an opportune time for India to intensify exports, assist imports of inputs over finished products, and set the stage for Indian manufacturing to bolster its global presence.

Kumar further underscored: “With COVID hopefully behind us, an all-out drive to speed up infrastructure projects that have a cascading positive effect on both domestic and EXIM trade is required. GST input credit for the developers of new infrastructure facilities will spur investments and bring down logistics costs. The time is also ripe to push for innovations aimed at the development and adoption of green energy.”

Also read: Union Budget 2023 LIVE updates: Finance Minister Nirmala Sitharaman to table budget today

Also read: Budget 2023 to see rise in poll-oriented spending; rural, infra capex boost likely: UBS

Also read: Budget 2023: Experts want govt to widen tax base, do away with cess, surcharges