Good tidings for cargo
In a welcome move which took almost all investors and industrialists by surprise, the government took a pro-industry and more importantly, a pro-logistics stance, in the Budget this year. A lot of issues which had been sidelined were tabled, and a host of
The Budget 2014-15 turned out to be more than a pleasant surprise for the logistics community in India. For sure, everything proposed will take time to have the desired effect, but the main thrust of the government has been on building infrastructure, doing away with red-tapeism, allocating funds for connectivity, and incentives for FDI.
Union Finance Minister Arun Jaitley, despite warnings of a ‘strict’ Budget, veered more towards boosting industry and infrastructure than increasing taxes during an alreadytough economic period. Perhaps the biggest game-changer for the industry was tabling of the issue of Goods and Service Tax (GST).
A long-dallied topic which has caused multiple taxation for those plying across state lines, the overall aim is to simplify the tax structure to a single slab. The previous administrations had mulled the issue without much head-way, but the present government has set a deadline for the end of the year. And this will be not just to have a resolution on the subject, but to have it implemented! Now, that is something to wait for.
The Finance Minister has also assured to provide necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts.
Then there are a slew of funds allotted for infrastructure development, which is the next most-heartening thing for the cargo industry. Over 37,800 crore has been earmarked for investment into boosting the NHAI and State roads for better connectivity. The corpus of 10,000-crore venture capital fund for start-ups will prove to be nothing less than a god-send for small-scale players. The proposed investment of
5,000 crore in warehousing is also heartening for the industry.
The government’s commitment to create single-window e-biz portal for all clearances and payments related to regulatory compliance is a very positive move towards transparency.
The long-awaited demand of forwarders of 24/7 customs clear-
ances in all major airports and ports was also addressed in this Budget. Moving beyond, setting up of logistic parks and private freight terminals on PPP basis would undoubtedly improve efficiencies and cargo handling.
Besides an expected hike in freight charges, the Rail Budget has unleashed a plethora of development for the cargo and logistics community. Foreign Direct Investment up to 100% would be allowed under the automatic route in railway infrastructure projects, including projects like high-speed trains, sub-urban and dedicated freight corridors under publicprivate partnership (PPP) mode. The budget has also proposed faster construction of Tori-Shivpur-Kathautia, Jharsuguda-Barpalli-Sardega and Bhupdeopur-RaigarhMand rail links, which have been delayed by several years. A Diamond Quadrilateral has been announced for highspeed trains, which would also benefit cargo movement. In fact, the Railway Minister
Sadananda Gowda has put forward the claim that Indian Railways would soon become the largest freight carrier in the world! Over and above this, 16 new port projects have been announced in the current fiscal year. Finance Minister Jaitley also proposed to allocate an amount of 11,635 crore for the development of the first phase of the outer harbour project in Tuticorin. SEZs (special economic zones) will also be developed in Kandla and Jawaharlal Nehru Port Trust at Navi Mumbai. That, and all the other promises made in this Budget, would make anyone say that this is what the cargo and logistics industry had been waiting for a long while. These moves were neccessary, and the government has heeded them, in a right move. What’s needed now, is patience and hope of fruition.