The logistics industry had to listen intently to Finance Minister Arun Jaitley’s Union Budget 2018 speech to fish out benefits for them. With the government presenting the annual Budget, a roadmap has been set for the year. There are mixed reactions from the industry. While few feel the budget is a mix of growth and opportunities, on the other end, according to few experts, the budget is again not directly going to benefit the logistics sector. However, industry is optimistic with the earlier announcements like the infrastructure status and e-way bill. The industry is also confident with the government’s move of pushing infrastructure development through Sagarmala and Bharatmala projects. We bring you some industry views.

Sanjay Bhutani, Managing Director – India & Saarc, Bausch & Lomb India, tells, “The Budget 2018 has been presented in the backdrop of economic growth expectations in the region of 8 per cent in near future and a target to reduce fiscal deficit. The Budget has done well on directing the government’s priority to two important sectors for the economy, Agriculture and Health. As for the direct tax proposals, the proposal to reduce the tax rate of 25 per cent for companies with revenues of Rs 250 crores is welcome as this is a step-in direction to reduce direct tax rates to make this comparable to competing economies.”

Piyush Kumar Singh, CEO, Indus B2B Solutions, says, “While the logistics industry would not get many direct benefits from the Union Budget 2018-19, the sector is likely to benefit from upcoming major transportation projects. The transportation projects would benefit transportation and logistics companies by reducing costs, increasing transit speeds and lowering turnaround times. The industry stands to benefit from the upcoming infrastructure projects like Sagarmala, Bharatmala as well as the various Dedicated Freight Firstly, the Government transportation projects like Bharatmala and Sagrmala are likely to benefit all logistics players. However, it is unlikely that the industry would receive a direct benefit from the Union Budget 2018 in the form of subsidies or tax reductions. Secondly, certain sub-sectors such as cold chain and Container Freight Station (CFS) providers are likely to get specially favoured by the Union Budget. CFS providers could benefit by creation of Special Economic Zones (under Sagarmala) as well as subsidies for setting up of logistics hubs (under Dedicated Freight Corridor schemes).

Vikram Puri, CEO, Transworld Technologies, Pune, says, “We are pleased to see the government’s continual focus on the ‘Smart Cities’ mission and its development through advanced infrastructure as announced in the Budget 2018. The government must however continue to look at our logistics infrastructure with specific development and investment targets, like the plan for 101 new projects in the cold chain, truck terminals and stops, and better facilities for safer road transport operations. Big data, integrated services, transparency of government deliveries will truly ensure that the Smart Cities mission will deliver results.”

Adarsh Hegde, Joint Managing Director, Allcargo Logistics, says, ‘Budget 2018-19 has an overall balanced view with focus on the masses. After last year’s GST rollout, we expected this budget to focus more on direct taxes. There weren’t too many announcements for the logistics sector, but the emphasis on infrastructure expenditure is a welcome move. Development of 35,000 km of road network under phase 1 of the Bharatmala project is a key corollary to addressing vital connectivity issues.” “The concerns of the logistics have also been looked into with the setting up of a National Logistics Information Portal. A much-needed single window clearance digital platform for stake-holders across the supply chain spectrum will enable them to consolidate their market competencies. Significant focus on healthcare, education, rural upliftment and digital India is laudable. Marginal slippage in fiscal deficit is a slight worry but overall it is a people friendly budget. However, we will have to deep dive for better understanding,” he adds.

Chander Agarwal, Managing Director, TCIEXPRESS, notes, “As rightly mentioned by the Finance Minister in his budget speech that infrastructure is the key growth driver of the economy and the government has made its intent clear to develop infrastructure in India by introducing several important measures. Logistics getting an infrastructure status last year, such focus to develop infrastructure in itself is a huge boost to the logistics sector. We welcome government’s decision to allocate of Rs 5.35 Lakh crore to develop 35,000 km under phase 1 as part of Bharatmala project. We also welcome other important initiatives like the decision to boost the MSME sector by allocating Rs 3,794 crore in the form of capital support; initiative to set-up National Logistics Portal as a single online window to link all stakeholders and decision to allocate Rs 2.4 lakh towards smart cities development will push the need for express companies like TCIEXPRESS. All these along with other important measures like introduction of digital payment models like pay-as-you-use system for toll payments will enable a cashless economy and will promote ethical and transparent business. Overall this is a very good budget and these initiatives will bolster the need for express companies and help us operate efficiently. Ultimately, it will help in contributing more towards the GDP.”

According to Anshul Singhal, CEO, Embassy Industrial Parks, “India is one of the fastest growing economies in the world today. The inefficient logistics account for about two per cent of the country’s GDP, so high costs could be attributed to inadequate infrastructure. There is a massive need of optimisation. There is no doubt that the current government is highly supportive of developing logistics and infrastructure. We are aware of the fiscal deficit and reducing exports in the country and this is a reason to worry but the high cost of logistics in India is coming into sharp focus as one of the key factors affecting the country’s cost competency.” “We hope that new reforms like Make in India, GST, Digital India and some reliefs given to the industry in the upcoming budget would help enhance performance in this segment and help grow trade nationally. Focusing on improving trade efficiencies within the country, creating millions of new jobs and contributing significantly to the country’s GDP,” he continues.

According to Vivek Kele, Director, Teamglobal, “The budget has a very good impetus in infrastructure. Focus on infrastructure will have a positive impact on the logistics sector in the long-run along with employment generation.”

Mohit Goyal, Director, TKW Management Solutions, says, “Firstly there weren’t too many SOPs directly benefiting our trade and so there isn’t much to cheer about for logistics industry. Even indirect taxes announced in-form of extra duty levies on mobile phone and TV are platonic on surface, but underneath the idea is to please those who have invested in manufacturing setup over last two to three years. “ “I am a bit disappointed as the tax environment is still not competitive. On one hand, MSME tax is reduced to 25 per cent which is welcomed, but, on the other cess is increased. Also, our Finance Minister had earlier promised to do away with all cess and other such levies but that still hasn’t been the case. Just for comparison, most Asian economies have corporate taxes (all inclusive) in the range of 16-25 per cent,” he adds.

Sunil Kohli, Managing Director, Rahat Cargo, opines, “With regards to aviation and logistics sectors, the Finance Minister should announce certain vital measures to upgrade the small airports apart from their connectivity to the metro cities. The logistics related to the air exports needs to be equipped with all the possible facilities which can smoothen the entire process of exporting the goods. A special emphasise is also anticipated whereby, a boost to the export of agricultural products shall be provided by granting incentives to the shippers and liberalising the paper formalities.”