Aneel Gambhir Chief Financial Officer Blue Dart
Post the implementation of Goods and Services Tax (GST) in July 2017 and the industry being accorded with an infrastructure status in November 2017, this will be the first Union Budget and therefore we’re expecting to see high relevance and more sector specific policies. Though interstate movement of goods will become easier with reduced procedures and restrictions at state borders, there is a lot of clarity needed to ensure a smooth process. With the dismantling of check posts at state borders and the implementation of e-way bill in the next few weeks, we are expecting that it will bring about a positive impact on transit times and relief from the complex statebased tax structures. We are hoping that the government considers Aviation Turbine Fuel (ATF) under the ambit of GST. For now, excise/ VAT paid on these products are not available as input credit. Under the Service Tax regime, input credit was available for the excise paid on ATF. This had a negative impact on logistics costs.
In 2017-18, the government initiated several public-private infrastructure projects with major players, which have led to faster execution, creation of a stable ecosystem, a boost to the job market and the economy. Presently, the Indian express industry is witnessing development and expansion of its existing infrastructure, emergence of e-commerce specific logistics solutions, has a strong focus on manufacturing. But it also has a large presence of unorganised service providers. Economic reforms, trade co-operation, improved transportation infrastructure and industrial growth is ushering opportunities for the logistics service providers (LSPs) in India.
However, India lacks the availability of world-class cargo transit hubs, which has resulted in business shifting to other neighbouring countries. Development of dedicated freight corridors for both rail and road transport, which can provide better multi-modal transport (connecting airports) is yet to be conceptualised in the country. This should be partially addressed by the recently announced infrastructure project Bharatmala, connecting 550 districts to the National Highway and Sagarmala that aims to de-congest major ports as well as commission at least six new mega ports.
The industry anticipates more schemes under ‘Make in India’, ‘Skill India’, and ‘Digital India’ initiatives, which would help in the boost of the upstream and downstream economic activities. According to a report by Morgan Stanley, India’s economy is expected to grow by more than 10 per cent annually and touch US$6 trillion by 2026-27.