Bud­get de­mand: Sus­tain­able SCM

Cargo Talk - - Interview -

Adil Zaidi Ex­ec­u­tive Direc­tor – Gov­ern­ment & Trans­ac­tion Ad­vi­sory Ser­vices Ernst & Young LLP

The an­swer to the in­nu­mer­able chal­lenges, in the lo­gis­tics sec­tor, is to ad­dress them proac­tively through sus­tain­able sup­ply chain man­age­ment and lo­gis­tics prac­tices.

This bud­get we ex­pect the gov­ern­ment to per­ceive the sec­tor holis­ti­cally and fo­cus on bring­ing the lo­gis­tics cost at the com­par­a­tive level, i.e., we spend around 13 per cent of our GDP in lo­gis­tics re­lated ac­tiv­i­ties and is sub­stan­tially high when com­pared with de­vel­oped coun­tries. We should aim to bring down the cost to eight per cent in the next few years.

Anil Arora

Pro­moter – Direc­tor, MJ Lo­gis­tic Ser­vices

Since the ad­vent of GST in 2016 will bring the need for bet­ter in­fra­struc­ture for the in­dus­try as a whole, it will re­quire long term in­vest­ments; the bud­get should en­vis­age avail­abil­ity of long term (more than 10 years) and cheaper debt.

With ref­er­ence to cold chain, I think the in­fra­struc­ture cap­i­tal ex­pen­di­ture and ca­pac­ity in­duc­tion chal­lenge have been suf­fi­ciently met by the var­i­ous sub­si­dies and in­cen­tives given by var­i­ous au­thor­i­ties.

The bud­get should fo­cus on get­ting cheaper and con­stant power to the in­dus­try, en­abling it to meet its big­gest op­er­at­ing chal­lenge.

De­babrata Bhat­tachar­jee

Gen­eral Manager- In­dia and Sub- Con­ti­nent, Good­pack Re­turn­able So­lu­tions In­dia

The In­dian lo­gis­tics in­dus­try as a whole is a highly frag­mented one and as it is al­ready marred with a rigid tax en­vi­ron­ment hope­fully GST will come to the res­cue, sooner rather than later. The cur­rent lay out of the bud­get has mixed re­ac­tions from in­dus­try play­ers like us as we were ex­pect­ing a re­form-ori­ented bud­get, which would com­pletely over­haul the pre­vail­ing tax­a­tion sys­tem and smoothen the tran­si­tion of the much awaited GST. Other key ini­tia­tives should be around de­con­ges­tion of sea­ports and air­ports, en­gi­neer the over­lap of cargo net­works, clar­ity on var­i­ous on­go­ing tax is­sues so as to mit­i­gate lit­i­ga­tions, im­ple­ment the move­ment of bulk com­modi­ties into mu­ti­modal modes like rail and wa­ter­ways lead­ing to cost man­age­ment and more op­tions for lo­gis­tics play­ers like us. The in­ten­tion and the aim of the new gov­ern­ment to pro­vide a ‘Ro­bust phys­i­cal in­fra­struc­ture’ con­nect­ing each part key man­u­fac­tur­ing clus­ters in the coun­try is also a very wel­come move and we as a lo­gis­tics in­dus­try en­tity look for­ward to its quick im­ple­men­ta­tion.

Vi­neet Kanau­jia

Vice Pres­i­dent – Mar­ket­ing, Saf­ex­press

The big­gest chal­lenge is poor in­fra­struc­ture whether it is roads, rail­ways or air­ports; the golden quadri­lat­eral ac­tiv­ity has to be paced up. Reg­u­la­tory bod­ies should be re­moved and the check posts should be au­to­mated. A uni­form tax­a­tion sys­tem, ie, GST can help in that. There is a huge sup­ply chain skill gap. Look­ing at the bot­tom of the pyra­mid, it is where the max­i­mum num­ber of man­power ex­ists. But there is a huge gap be­cause they are not paid well and there is a lack of ba­sic ameni­ties. We need train­ing in­sti­tutes as the driv­ers are not well trained. Apart from the three pri­mary things that the gov­ern­ment needs to look at, the ‘In­dus­try’ sta­tus is go­ing to help as our in­dus­try has too many Min­istries.

SA Mo­han

Chief Ex­ec­u­tive Of­fi­cer, Maini Ma­te­ri­als Move­ment

We are ex­pect­ing a growth-ori­ented bud­get en­cour­ag­ing in­vest­ments in in­fra­struc­ture and height­en­ing con­sump­tion de­mand. This could be achieved by easy tax regime fur­ther en­abling ex­ports.n There must be a spe­cific fo­cus to give a boost to the ware­hous­ing sec­tor and mod­ernise it to in­ter­na­tional stan­dards. I am sure that the next union bud­get will ful­fil th­ese ex­pec­ta­tions and cre­ate an en­vi­ron­ment for grad­u­at­ing In­dian ware­hous­ing and lo­gis­tics mar­ket to of­fer value propo­si­tions.

ML Arora

Chief Ex­ec­u­tive Of­fi­cer, Fresh & Healthy En­ter­prises

As most of the pro­mo­tional schemes of var­i­ous gov­ern­ment de­part­ments are limited to pro­vid­ing sub­si­dies for con­struc­tion of cold stor­ages, food parks, lo­gis­tics, etc my ex­pec­ta­tions and rec­om­men­da­tions to the Gov­ern­ment of In­dia for devel­op­ment of cold chain are as un­der:

Cus­toms and ex­cise du­ties on cold chain equip­ment need to be pegged at five per cent or be­low to en­cour­age do­mes­tic and for­eign in­vest­ments for min­imis­ing hor­ti­cul­tural wastages and in­creas- ing shelf life of prod­ucts; Con­struc­tion of pre-cool­ing cen­tres, cold stores in the pro­duc­tion ar­eas should be given top most pri­or­ity in all gov­ern­ment schemes; Bud­get al­lo­ca­tion shall be in­creased for sup­port­ing pre-har­vest ac­tiv­i­ties for farm­ers like im­prov­ing the seed stock to aug­ment ir­ri­ga­tion fa­cil­i­ties; The gov­ern­ment should pro­mote launch­ing of well-de­signed and large-scale projects un­der PPP model on a viability gap fund­ing ba­sis to mod­ernise the coun­try's cold chain.

Varun Aditya Tha­par

Vice Chair­man, Indi­con En­ter­prises

In or­der to give a boost to the lo­gis­tics sec­tor, and par­tic­u­larly the multi-modal con­tainer lo­gis­tics sec­tor as well as the cold chain lo­gis­tics sec­tor, here are my sug­ges­tions: There should be a rate clas­si­fi­ca­tion re­view for con­tainer cargo – more com­modi­ties and prod­ucts should be al­lowed to be trans­ported by the CTOs. A com­pet­i­tive en­vi­ron­ment should be en­cour­aged rather than stymied by the Rail­ways. De­vel­op­ing a na­tion-wide cold chain net­work should be made a fo­cus point by en­cour­ag­ing in­vest­ment into the sec­tor through in­cen­tives and schemes. There should be uni­form VAT rate across all the states for the same man­u­fac­tured goods per­tain­ing to the lo­gis­tics sec­tor. Lower tax­a­tion rates should be en­cour­aged even when GST comes in to boost do­mes­tic man­u­fac­tur­ers of cap­i­tal equip­ment. Speedy com­ple­tion of the DFCC will be a big boost for all lo­gis­tics play­ers.

Vi­jay Ku­mar

Chief Op­er­at­ing Of­fi­cer, Ex­press In­dus­try Coun­cil of In­dia (EICI)

More than fis­cal in­cen­tives/ changes, EICI has been ask­ing the gov­ern­ment for pro­ce­dural sim­pli­fi­ca­tions and mod­i­fi­ca­tions so that cus­toms clear­ances are ex­pe­dited at all gate­ways. The reg­u­la­tory clear­ances re­quired, if sim­pli­fied, would go a long way in im­prov­ing In­dia’s rank­ing in ‘Ease of Do­ing Busi­ness’. Se­condly, cus­toms staff are posted on cost re­cov­ery at ex­press ter­mi­nals. Cus­toms clear­ance is a sovereign func­tion and cost re­cov­ery of staff posted at ter­mi­nals should be waived off. De­spite cus­toms hav­ing is­sued a no­ti­fi­ca­tion pro­vid­ing norms for such waivers in April 2013, this has yet not been im­ple­mented. We hope the gov­ern­ment would im­ple­ment this to lower trans­ac­tion costs for our ex­porters and im­porters.

Atul Shah

Coun­try Direc­tor, Kardex In­dia Stor­age So­lu­tions

Faster im­ple­men­ta­tion and roll out of DTC and GST is what can in­state a new vigour. It will also prove that the gov­ern­ment is ready to ‘walk the talk’. For ‘Sup­ply Chain and Lo­gis­tics’ per se this will have very wide im­pact con­sid­er­ing cur­rent hin­drances faced by all man­u­fac­tures or im­porters for im­prov­ing dis­tri­bu­tion ef­fi­cien­cies. The ef­fect can be so vi­ral and have lu­bri­cat­ing ef­fect over the lo­gis­ti­cal chal­lenges faced to­day, by this sec­tor, that it will help in re­duc­tion of cost which can be passed on to the con­sumer and sup­port to the gov­ern­ment in its ef­fort to tame in­fla­tion.

Rad­hara­manan Pan­icker Man­ag­ing Part­ner, R Lo­gis­tics So­lu­tions and Man­ag­ing Direc­tor, Danger­ous Goods Man­age­ment In­dia

The lo­gis­tics in­dus­try needs clear cut pol­icy from the gov­ern­ment on var­i­ous el­e­ments of lo­gis­tics busi­ness- ware­hous­ing zone pol­icy, danger­ous goods stor­age & han­dling pol­icy and in­fra­struc­ture devel­op­ment. The en­tire pol­icy on Cus­toms with re­spect to estab­lish­ment of new bonded fa­cil­ity in­side and out­side the air­port should be changed. Cus­toms de­ploy­ment on new bonded fa­cil­i­ties or air­port fa­cil­ity should be com­pletely free of cus­tom’s cost re­cov­ery. Most im­por­tantly in terms of danger­ous goods trans­porta­tion es­pe­cially by air, there needs to be a bet­ter reg­u­la­tion and mon­i­tor­ing as the way the whole busi­ness is to­day de­vel­op­ing. Fi­nally there has to be an author­ity on all mat­ters of air cargo – the gov­ern­ment needs to fi­nalise that.

Ra­jin­der Singh

Man­ag­ing Direc­tor, Janta Road­ways

It is nec­es­sary to de­velop sus­tain­able strat­egy based on in­no­va­tive in­fra­struc­ture that would ap­ply ef­fec­tive mod­ern tech­nol­ogy to mul­ti­ply the road trans­port to at­tain free move­ment of the ve­hi­cles on the In­dian roads. The trans­port in­dus­try could not gets its due recog­ni­tion like any other in­dus­try since the same is very much un­or­gan­ised. The ‘In­dus­try’ sta­tus may be con­ferred for trans­port in­dus­try. A Trans­port Uni­ver­sity to be set up. Lo­gis­tics parks to be set up across the coun­try for speedy de­liv­ery Mul­ti­modal trans­porta­tion sys­tem to be en­cour­aged and pro­vide the re­quired in­fra­struc­ture. Wa­ter ways and coastal ship­ping to be en­cour­aged. All the cor­po­rate and busi­ness or­gan­i­sa­tions should share their out­stand­ing more than 60 days due to lo­gis­tics or trans­port com­pa­nies in their bal­ance sheet and an­nual re­port as comes un­der SME, MSME. Weighted de­duc­tion un­der In­come Tax for re­search ac­tiv­i­ties and driver wel­fare schemes should be con­sid­ered on par with the man­u­fac­tur­ing re­search and devel­op­ment ac­tiv­i­ties.

SGK Kishore

Chief Ex­ec­u­tive Of­fi­cer, GMR Hy­der­abad In­ter­na­tional Air­port Limited (GHIAL)

In line with the re­cently in­tro­duced draft Civil Avi­a­tion pol­icy which laid em­pha­sis on the devel­op­ment of air cargo, we ex­pect the Union Bud­get to ad­dress the fol­low­ing struc­tural prob­lems in the lo­gis­tics and trans­port sec­tor and ad­dress the same:

Rec­om­men­da­tion to State Gov­ern­ments to re­duce the VAT on ATF so that avi­a­tion sec­tor be­comes more cost com­pet­i­tive

Abol­ish Ser­vice Tax at In­dian MROs, and in­crease du­ra­tion of air­craft spares that can be stored in ware­house with­out be­ing taxed to three years from cur­rent one year Sim­pli­fi­ca­tion and re­duc­tion in the cus­toms doc­u­men­ta­tion re­quire­ments for im­ports and ex­ports Grant ‘In­dus­try’ sta­tus to the lo­gis­tics sec­tor

Venu­gopal Bangera

Chief Ex­ec­u­tive Of­fi­cer, Cargo Ser­vice Cen­ter

To nur­ture the growth of air cargo in the coun­try, in­fra­struc­ture for cargo needs a ma­jor at­ten­tion with spe­cial em­pha­sis on build­ing ded­i­cated cargo ter­mi­nals. The fol­low­ing could help the sec­tor to in­crease or cre­ate the in­vest­ment op­por­tu­ni­ties from var­i­ous al­ter­na­tives: Cargo ter­mi­nals should be granted ‘In­fra­struc­ture Sta­tus’ which would help the in­dus­try to raise huge funds at op­ti­mum rates to es­tab­lish the world class in­fra­struc­ture for fa­cil­i­tat­ing the ef­fi­cient and ef­fec­tive han­dling of air cargo; Up­grad­ing For­eign Di­rect In­vest­ment (FDI) per­cent­age in cargo in­vest­ment would also act as an added ad­van­tage for this sec­tor. This will open gates to var­i­ous in­vestors and in turn will help the in­dus­try to achieve its height.

De­bashis Dutta

Chair­man, Fed­er­a­tion of Freight For­warders' As­so­ci­a­tions in In­dia (FFFAI)

Cus­toms Act should be suit­ably amended to make Cus­toms a nodal agency and should be em­pow­ered to pre­vail on other al­lied agen­cies for clear­ance of EXIM Cargo.

Cus­toms Act needs to be suit­ably amended to pro­vide trade fa­cil­i­ta­tion and greater clar­ity. Cer­tain sec­tions such as Sec­tions 17(4), 17(5) and 149 of the Cus­toms Act need to be amended.

The Unit Quan­tity Code in dif­fer­ent sec­tions should be suit­ably amended to have con­form­ity with trade prac­tice. Amend­ment should be done to Ser­vice Tax Act to in­clude ex­port ocean freight un­der neg­a­tive list.

Sa­mar Nath

Chief Ex­ec­u­tive Of­fi­cer, DHL Global For­ward­ing

Our in­dus­try needs a more fo­cused ap­proach as this is re­sult­ing in acute op­er­a­tional in­ef­fi­cien­cies.

There is need for an in­te­grated plan­ning ap­proach through a cen­tralised reg­u­la­tory lo­gis­tics body with key stake­hold­ers from rel­e­vant min­istries. This would en­sure proper co­or­di­na­tion and devel­op­ment of projects in a timely man­ner. I would even sug­gest giv­ing a pre­mium to speed up timely com­ple­tion of projects in the lo­gis­tics space.

NN Ku­mar

Chair­man, Jawa­har­lal Nehru Port Trust (JNPT)

Most of the ma­jor ports of the coun­try are suf­fer­ing from draught re­stric­tion in their chan­nels. For shift­ing trans­ship­ment of con­tain­ers to In­dian coast there is an ur­gent need for huge in­vest­ment by all ma­jor ports in deep­en­ing their chan­nels. Glob­ally such ex­er­cise gets bud­getary sup­port from gov­ern­ment. There is an ex­pec­ta­tion that there will be some pro­vi­sion in the up­com­ing bud­get for sup­port­ing cap­i­tal dredg­ing projects of the ports.

There are also ex­pec­ta­tions for bud­getary sup­port for coastal move­ment of goods by way of waiver of duty on bunker fuel and re­lax­ation from tax with­hold­ing pro­vi­sions in case of In­dian flag ves­sels. The Mar­itime and Port sec­tor is also ex­pect­ing some kind of sub­sidy by bud­getary pro­vi­sion in case of modal shift of trans­porta­tion of goods from rail and road to wa­ter­ways and coastal move­ment along with en­hanced al­lo­ca­tion to IWA for cre­at­ing in­fra­struc­ture.

Shailen­dra Jain

Vice Pres­i­dent, Delhi Cus­toms Clear­ing and For­ward­ing As­so­ci­a­tion

With ref­er­ence to the pre-bud­get ex­pec­ta­tions, I be­lieve that

There must be uni­for­mity in pro­ce­dures, bond for­mats and lan­guage, per­forma of rel­e­vant doc­u­ments needed in im­port/ex­port clear­ances at dif­fer­ent cus­tom ports across the coun­try;

There is great lack of aware­ness in trade per­tain­ing to com­pli­ances un­der al­lied laws / reg­u­la­tions and pro­ce­dures. Their pro­ce­dure needs to be sim­pli­fied and at­tempts must be there to ed­u­cate trade about same; As per Cus­toms Cir­cu­lar, it is re­spon­si­bil­ity of ev­ery cus­toms bro­ker to ob­tain KYC from his client. In case of any mis-dec­la­ra­tion / fraud at­tempted by a client, the re­spon­si­bil­ity of a cus­toms bro­ker must be over once he has duly ob­tained KYC doc­u­ments from his client un­less it is found that he has wil­fully mis-rep­re­sented the facts or com­mit­ted fraud; Verification of IEC code and re­lated in­for­ma­tion/doc­u­ments must be done at the time of is­suance of IEC it­self. And it must be ver­i­fied ev­ery year whether it is op­er­a­tive and if any changes have oc­curred in pro­vided de­tails by IEC holder; The charges of ship­ping lines / air­lines levied un­der var­i­ous heads, e.g. freight, de­liv­ery or­ders, etc. must have stan­dard­ised norms. Fur­ther, they must be in­formed to cus­tomer at the time of book­ing of cargo so that there be no am­bi­gu­ity later caus­ing un nec­es­sary de­lay/over­heads.

Kruti Joban­pu­tra

Direc­tor, JWC Lo­gis­tics Park & JWR Lo­gis­tics

With Naren­dra Modi’s strong gov­er­nance and will­ing­ness to­wards ‘Make in In­dia’, the gov­ern­ment needs to first con­cen­trate on im­prov­ing sit­u­a­tions within the coun­try to boost the in­ner devel­op­ment; only then MNCs will be at­tracted to come and ‘Make in In­dia’.

There­fore, in the next bud­get, the gov­ern­ment should fo­cus on im­prov­ing the in­fra­struc­ture for the in­ner devel­op­ment of the coun­try.

To­day, the lo­gis­tics in­dus­try is suf­fer­ing ma­jorly be­cause of very poor in­fra­struc­ture. The JNPT Port, which is han­dling 70 per cent of the en­tire vol­ume of im­port and ex­port into In­dia, is in a very poor con­di­tion as com­pared to any other port in the world han­dling such a big vol­ume. The road, rail and sea con­nec­tiv­i­ties all need to be re­vamped; only then will a MNC say ‘Make in In­dia’.

Mu­rali Ra­machan­dran

Chief Ex­ec­u­tive Of­fi­cer In­dia, Celebi Avi­a­tion Hold­ing Inc Look­ing for­ward to re­lax­ation of FDI norms in the ground han­dling and cargo ter­mi­nal han­dling busi­nesses. As of now a for­eign in­vestor is per­mit­ted to in­vest 74 per cent only; per­mit­ting a 100 per cent through au­to­matic route will help cred­i­ble play­ers to bring in more in­vest­ments with­out hav­ing to form a lo­cal struc­ture. Ra­tio­nalise tax­a­tion pol­icy with re­spect to im­port du­ties in spe­cific and re­in­state the EPCG scheme for im­port of ground han­dling and cargo busi­ness re­lated in­vest­ments. Given our geo­graphic lo­ca­tion, a sig­nif­i­cant po­ten­tial lies for In­dian gate­way air­ports to be­come trans­ship­ment hubs. Nec­es­sary changes and reg­u­la­tory re­forms as 24 x 7 cus­toms op­er­a­tions, full adop­tion of EDI, ramp to ramp trans­fer etc. are re­quired to make this hap­pen. Air­port op­er­a­tors must look at of­fer­ing sub­sidised land­ing and park­ing fees to pro­mote freighter move­ments.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.