GST an elixir for the in­dus­try

Early roll-out im­per­a­tive

Cargo Talk - - Industry Speak -

We hope that the govern­ment, in its up­com­ing Bud­get for FY15, shall nec­es­sar­ily give the fi­nal go to the much-awaited Goods & Ser­vice Tax (GST) roll­out plan. This is im­per­a­tive to shed the state level bar­ri­ers and sim­plify the tax struc­ture. GST, in our opin­ion, will prove to be the true game-changer for the lo­gis­tics in­dus­try as well as for the manufacturing in­dus­try; in terms of mak­ing them com­pet­i­tive enough to meet the in­ter­na­tional stan­dards of cost of in­ven­tory hold­ing, plus trans­ac­tion cost, which is one of the ma­jor weak links in In­dia's global com­pet­i­tive­ness. We are con­vinced that the early roll-out of GST will help the govern­ment in tack­ling the se­ri­ous is­sue of in­fla­tion & wastage of per­ish­able goods.

In ad­di­tion, creat­ing mother ware­houses, en­cour­ag­ing hub- and-spoke model for move­ment and stor­age of goods will en­able ef­fi­cient dis­tri­bu­tion chan­nels to earn the much-de­sired de­pend­abil­ity on the lo­gis­tic in­dus­try. Re­al­i­sa­tion on the govern­ment’s part that any manufacturing, trade or in­fras­truc­tural devel­op­ment will have to be backed by an equally ef­fi­cient & ro­bust lo­gis­tics sec­tor in place is ex­tremely crit­i­cal.

In our view, if the PMO en­sures that the project-fi­nanc­ing and fast-track­ing of all pre-ap­proved ma­jor projects, it will have pos­i­tive ef­fect on the econ­omy which will also ben­e­fit the lo­gis­tics in­dus­try di­rectly. In ports, mod­erni­sa­tion and fund­ing for de­vel­op­ing the deeper drafts us­ing the huge re­sources and cash-flows earned through roy­al­ties from pri­vate port de­vel­op­ers. Most ma­jor ports have sub­stan­tial cash re­serves. This has not been done by con­sec­u­tive gov­ern­ments to fa­cil­i­tate econ­omy of scale by ac­com­mo­dat­ing larger ships to call at our ports. There should be cross-fund­ing by the port trusts with ut­most ur­gency, be­cause they all are con­trolled by the Cen­tral Govern­ment.

We truly hope that, in the up­com­ing Bud­get, there shall be pro­pos­als to re­vive the ‘Sa­gar Mala’ ini­tia­tive launched by for­mer Prime Min­is­ter Atal Bi­hari Va­j­payee. The con­di­tion of roads lead­ing to most ports in our coun­try is quite pa­thetic, and rail con­nec­tiv­ity to the ports is a mat­ter of con­cern for all par­ties in­clud­ing ex­porters, ship­ping lines and trans­porters. All these ini­tia­tives are of great help.

En­cour­ag­ing coastal ship­ping through sub­si­dies to man­u­fac­tur­ers/ex­porters will not only de­con­gest the roads, but also pro­mote en­ergy-sav­ing and cost ef­fi­ciency in trans­porta­tion. We urge the govern­ment to fast-track im­ple­men­ta­tion of rec­om­men­da­tions of the PVK Mo­han Com­mit­tee to en­cour­age coastal ship­ping & in­land wa­ter­ways.

All mea­sures which can help re­duce lo­gis­tics costs to GDP, which cur­rently is much higher in In­dia in com­par­i­son to even some de­vel­op­ing coun­tries.

Shashi Kiran Shetty, Ex­ec­u­tive Chair­man, All­cargo Lo­gis­tics Ltd.

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