Bud­get 2015: Big but not bang

With the Gov­ern­ment pre­sent­ing the an­nual Bud­get, a roadmap has been set for the year. In­dus­try in­sid­ers have called Bud­get 2015-16 re­formist and well-in­ten­tioned. On a cau­tion­ary note, they have also said that the real take­aways will only be­come ap­par­ent

Cargo Talk - - Front Page - KALPANA LOHUMI

The Union Bud­get 2015-16 pre­sented by Fi­nance Min­is­ter Arun Jaitely has iden­ti­fied five ob­jec­tives in the lo­gis­tics sec­tor to be ad­dressed ef­fec­tively in the fis­cal year: im­prov­ing Public Pri­vate Part­ner­ships (PPP), tax struc­ture, in­fra­struc­ture, mak­ing In­dia a man­u­fac­tur­ing hub and cor­po­rati­sa­tion of ports. The bud­get also had wel­come re­forms, suc­cess­ful im­ple­men­ta­tion of which will bring about ma­jor growth.

The gov­ern­ment has in­fused con­fi­dence with the al­lo­ca­tion of ` 70,000 crore in in­fra­struc­ture space and set­ting up a Na­tional In­vest­ment and In­fra­struc­ture Fund (NIIF) to raise cap­i­tal to en­sure an­nual flow of ` 20,000 crore will re­sult in pro­mot­ing in­vest­ments in the lo­gis­tics in­fra­struc­ture.

The much awaited de­ci­sion to levy Goods and Ser­vices Tax (GST) from April 2016 has also brought hope to the in­dus­try.

The in­dus­try is look­ing for­ward to a uni­form tax­a­tion sys­tem be­com­ing a re­al­ity in April 2016, with the hope that the ef­fec­tive tax rate would trans­late into a col­lab­o­ra­tive gain for both cor­po­rate and con­sumers and cre­ate an en­vi­ron­ment for In­dian lo­gis­tics in­dus­try to of­fer value propo­si­tion. Bud­get 2015-16 has shown strong fo­cus on mak­ing In­dia a man­u­fac­tur­ing hub of the world.

The ‘Make in In­dia’ ini­tia­tive will give mo­men­tum to the man­u­fac­tur­ing sec­tor, thus lead­ing to growth in ex­ports mak­ing the in­dus­try com­pet­i­tive.

On the other hand, there is not much for air cargo sec­tor which could dampen the morale of air fra­ter­nity. How­ever, the point to be taken here is that lo­gis­tics in­dus­try will ben­e­fit from the growth of re­lated in­dus­tries like man­u­fac­tur­ing, trans­port, trade, en­ergy and con­sumer goods.

Su­nil Kohli, Man­ag­ing Direc­tor, Ra­hat Cargo

The Bud­get is well-in­tended, re­for­ma­tive, prag­matic, in­clu­sive, growth-ori­ented and fo­cused on cre­at­ing an at­mos­phere of pro-in­vest­ment and ce­ment­ing a strong eco­nomic foun­da­tion for the coun­try’s devel­op­ment. Un­for­tu­nately, the fi­nance min­is­ter has not touched upon the vi­tal is­sues re­lat­ing to the de­sired growth in the air cargo seg­ment which could largely help the coun­try in yield­ing con­sid­er­able rev­enue from abroad. The air cargo fra­ter­nity would ex­pect min­i­mal red­tapism in ac­com­plish­ing their tar­geted ex­port ac­tiv­i­ties apart from an en­hanced in­cen­tive for those in­volved in the sec­tor. Sev­eral con­ces­sions could be con­sid­ered to all the stake­hold­ers en­gaged in the air cargo sec­tor such as raw­ma­te­rial sup­pli­ers, the man­power, lo­gis­tics tools, trans­porters etc.

Ra­jeev Singh, Direc­tor Gen­eral In­dian Cham­ber of Com­merce

Even if there are no di­rect an­nounce­ments re­lated to lo­gis­tics sec­tor, we are hope­ful for the for­ward and back­ward link­ages and growth of this cru­cial sec­tor. The pro­posed in­vest­ment plan looks promis­ing. Con­nec­tiv­ity of air­ports with rail­ways would give a boost to the per­ish­able goods sec­tor and this would en­cour­age the use of mul­ti­modal trans­porta­tion. Trans­porta­tion of agri­cul­tural goods by the Rail­ways will help to cut down the re­lated costs. In­creas­ing the speed in nine rail­way cor­ri­dors will help re­duce lo­gis­tics lead time, which will ul­ti­mately ben­e­fit the in­dus­try.

RS Subra­ma­nian, SVP & MD – In­dia, DHL Ex­press

Speak­ing from an ex­press per­spec­tive, the big­gest chal­lenge re­mains ac­cess to ad­e­quate and com­pet­i­tively priced space at key air­ports that en­able ef­fec­tive op­er­a­tions. Ad­di­tion­ally, there are many pro­ce­dural ir­ri­tants in reg­u­la­tions gov­ern­ing in­ter­na­tional ex­press. Ex­press op­er­a­tors are re­stricted from car­ry­ing com­mer­cial ex­ports us­ing courier clear­ances. In­dian SMEs need ex­press so­lu­tions to par­tic­i­pate com­pet­i­tively in the global e-com­merce ex­port mar­ket, and such re­stric­tions need­lessly hold them back from com­pet­ing ef­fec­tively. On the im­ports side, ex­press op­er­a­tors are re­stricted from car­ry­ing per­ish­ables and in­di­vid­ual packages ex­ceed­ing weight limit of 70 kgs. Re­mov­ing th­ese reg­u­la­tory ir­ri­tants based on global best prac­tices would be crit­i­cal to in­crease ef­fi­ciency of ex­press lo­gis­ti­cal op­er­a­tions. Given that ex­press lo­gis­tics so­lu­tions are an im­por­tant part of fa­cil­i­tat­ing global value-chains, th­ese re­forms are ur­gently needed to en­sure the suc­cess of Prime Min­is­ter Modi’s vi­sion of ‘Make in In­dia’ and ful­fill­ing In­dia’s am­bi­tion of be­com­ing the next global man­u­fac­tur­ing hub.

Cyrus Kat­gara, Part­ner, Jeena & Co.

The bud­get is nei­ther hype nor un­der­rated. Only af­ter the im­ple­men­ta­tion of GST and sin­gle point tax col­lec­tion, the thrust of lo­gis­tics sec­tor can be sat­is­fied with the bud­get 2015-16. Speedy roll­out of GST will de­crease com­pli­ance bur­den for busi­nesses and cre­ate seam­less pan-In­dia mar­ket while bring­ing down the to­tal in­ci­dence of taxes by elim­i­nat­ing cas­cad­ing ef­fect of taxes on goods and ser­vices. Fo­cus on in­fra­struc­ture, sim­pli­fi­ca­tion of cus­tom process at ground level and go­ing pa­per­less for all trans­ac­tions are few points where sup­port from gov­ern­ment is re­quired. Also, the im­pact of the last year’s bud­get re­forms is yet to be seen.

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