Union Budget Announcement ‘Quite Encouraging’ for India’s Logistics and Supply Chain Sector

Chennai:

Port Wings News Network:

This Union Budget announcement is quite encouraging for India’s Logistics and Supply Chain sector and clearly defines the path that the nation’s supply chain is headed on. It focuses on building a robust business strategy revolution would take. The industry had several demands pertaining to expenditures for the requirements of Logistics infrastructure, skill development, and incentives for growing shippings together with actions that will increase the ease of doing business.

Logistics is one of the key areas of the Indian economy that needs to be fast-paced and the need for ‘Everything Logistics’ that would incorporate all the major tenets of the supply chain focusing more on inclusive development of the entire ecosystem. The government has taken cognizance of this segment, and has dedicated significant resources to the field of Logistics and Supply Chain. The Government has introduced 7 priorities as ‘Saptarishi’ complementing each other in the Union Budget 2023–2024. From an increased adoption of green growth and surging demand in shifts for energy transition, etc, to the focus on Youth Power, the Union Budget 2023–24 will have a significant impact on the supply chain infrastructure of the country.

We have curated an interesting collection of post-budget quotes from renowned leaders in the Logistics industry.

Appended below are the post budget 2023-24 quotes from the industry leaders

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Mr. Vineet Agarwal, MD at Transport Corporation of India

”This “Saptarishi” guiding-priorities based Union budget is holistic, optimistic and it beautifully fleshes out the ambitious schemes announced by the government to boost all critical segments. For the Logistics Sector, a committed focus on all tenets under NLP, will definitely lead the country from recovery to resurgence.

The increased Capital Outlay for critical Infra projects under the “Inclusive Development” priority will further boost sectoral development. The steep investment increment in digitization and automation to develop smart warehousing, and an announcement of 100 critical transport infra projects for steel, ports, rail and road will strengthen the much-needed multimodal connectivity. Provisions like coastal shipping with Viability Gap Funding (VGF) for people & freight movement will further facilitate seamless cargo movement while reducing logistics costs.

The Government’s Green Growth Priority outlines a relentless sustainability vision. ‘National Green Hydrogen Mission’ targets the transition from fuels to green energy. This movement will enable a smooth shift toward the Net Zero Carbon Emission goal. Moreover, the PM Gati Shakti Vishwavidhyalaya facilitates the “Youth Power Priority”, emphasizing on upskilling and creating opportunities for industry partnership.

Overall, the 2023 budget outlines a very futuristic glide-path for improving the supply chain ecosystem in India. It will further enhance the export of networked products, thereby indicating a world-class infrastructure and synergy across the logistics value chain.”

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Ms. Zaiba Sarang, Co-founder, iThink Logistics

“Adopting green and sustainable practices is the way toward the future, which has been acknowledged by the government quite profusely in today’s budget. The Union Budget 2023 places a strong emphasis on environmental responsibility. The ‘Panchamrit’ initiative is aimed specifically at achieving net zero carbon emissions by 2070, thus contributing to the green growth of the nation. Continuing to provide impetus for EV adoption in India, the government has taken robust steps through exemptions on customs duty levied upon the machinery imported for the manufacture of lithium-ion cells for EV batteries. The budget has also adequately covered infrastructure development by allocating INR 75,000 crore, including private investment, towards improving first- and last-mile delivery. As a part of the logistics sector, we are extremely elated at the announcement of these provisions, since they will help solve the current connectivity issues facing the industry while building a more sustainable future for logistics, where efficiency and environmental responsibility come together to form a sustainable ecosystem.”

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Nishith Rastogi, Founder & CEO, Locus

“It is encouraging to observe Green Growth as a priority pillar of the Union Budget 2023. In fact, the budgetary allocations and innovative policies all point towards the government’s ambitious plan of achieving net zero emission ‘Panchamrit’ by 2070. In this regard, I believe the logistics sector will play a crucial role, as non-electric vehicles are one of the major contributors to carbon emissions in India and across the world. To that end, special attention must be paid to the Indian supply chain and logistics sector, especially the last mile. By adopting new-age solutions driven by AI, ML, etc., this sector will be able to reduce vehicle emissions drastically and improve operational efficiency. We look forward to doing our bit to realize the government’s ambitious and timely initiatives.”

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Mr. Kishan Tiwari, Co-Founder and CEO, TSAW Drones (A Drone Tech Startup)

The Hon’ble Finance Minister’s announcement in the Union Budget 23-24 to revitalize 50 additional airports, heliports, water aerodromes, and advanced landing zones is a landmark decision. This will jumpstart the fourth industrialization by effectively utilizing drone technology for automation in logistics, transportation, infrastructure, and rural development, as well as create new-age jobs for the nation’s youngsters. TSAW is committed to supporting the government’s mission by assembling state-of-the-art ‘Made in India’ drones and DRONECO is committed to providing end-to-end drone services for internal sovereignty, last-mile connectivity, agriculture, healthcare and others. The announcement of the Agri Accelerator Fund by the government will encourage more entrepreneurs to serve Indian rich and heritage agriculture Industry. Being a Drone manufacturer, TSAW sees a big opportunity of collaborating with Agri start-ups to serve and show a real case of Drones in the Agriculture industry.

HINDUSTAN CHAMBER OF COMMERCE:

HINDUSTAN CHAMBER OF COMMERCE welcomes the Growth Oriented Budget announced by the Hon’ble Finance Minister, Government of India.

With substantially higher CAPEX allocation leading to multiplier effect, the budget aims at a higher GDP growth and employment creation.

The move to extend the revamped credit guarantee scheme for MSMEs and relief to Covid affected MSMEs are in right direction and shows the sensitivity of the Government towards them.

Reduction of 1% interest for MSME will further boost MSME growth and also allowing the payment to MSME as “Allowable Expenses” only when Actual payment made by corporates is a welcome step as it will enable the big companies to honour their commitments.

Reigning in the fiscal deficit under control and to bring it on track is highly commendable effort on the part of the Government.

Coming to specifics:

Unified Filing System in a common portal for various Government Departments would facilitate Ease of Doing Business.

The budget addressed the concerns of various stakeholders particularly the middle class by rationalising the tax slabs and increasing the basic exemption limit under the new tax regime, apart from increase in the Standard Deduction and threshold limit of leave encashment for Retirees.

Senior Citizens who are affected by the perils of inflation on one hand and lower interest rates on other hand will now be immensely benefited by the substantial increase in the maximum investment limits in case of Senior Citizen Savings Scheme and Monthly Income Scheme.

Another milestone initiative is the National Digital Library for Children and Adolescence and efforts for spreading financial literacy, through National Book Trust in regional language at Panchayat level.

Agri Accelerator Fund for agritech Start-ups by young Entrepreneurs from rural areas is appreciable initiative to bring the nextgen into agritech domain to improve productivity and use modern techniques.

National Data Governance Policy will enhance the operating efficiency in finance and banking sector and less burden to the finance sector.  Personal data protection will also given importance instead of providing copies all important documents.

Reducing customs duty from 21% to 13% (except Textile and agri products) is a welcome step to boost the value-added industrial sector.

Increase in capital sector expenditure will boost the economy and attract investments.

Simplification of 39000 procedures will increase the Ease of Doing Business.

Assigning 100 Joint Commissioner Level officers for Appeals in Taxation is a welcome step to reduce litigation – which our Chamber have been requesting for in the recent past.

Graded settlement of Redressing of Grievances in IT a bold step.

Empowering SEBI to award degrees and certificates through NISM will focus the requirements for the already skill shortage Securities Market. Efforts to have a risk based KTC is also a welcome measure.

Integrated IT portal for IEPF will enhance those to claim back their shares and dividends without much difficulty is the need of the hour and the budget addresses this concern, as the existing process is cumbersome.

Amendment to Banking Regulation Act , Banking companies Act and RBI act to be studied as details are yet to be received.

PAN a common identifier in law is taken with mixed reactions as what happens to AADHAR – having all biological identifier features. Details awaited and will comment later.

Dhaval Thanki, Vice President, APAC & MEA, LogiNext

“The Union Budget has focused on driving innovation and encouraging ease of doing business for startups, and that is very encouraging. The proposal to introduce the National Data Governance Policy for access to anonymized data will be a boon to the startup sector, and it will facilitate a lot of value creation for customers as well as businesses. Furthermore, proactive measures in areas of tax benefits and offsetting losses are welcome moves. At LogiNext, as we continue to build in India for the world, we look forward to growing the digitial prowess of the nation, through path-breaking innovations in logistics technologies, ably supported by the Government of India.”

Executive Director of The Plastics Export Promotion Council, Mr. Sribash Dasmohapatra

Substantial increase in capital investment outlay: The announcement to increase capital investment outlay by 33% to Rs 10 lakh crore would spur economic growth in general.

Higher allocation towards Prime Minister Awaas Yojana: The announcement to increase allocation for Prime Minister Awaas Yojana by 66% to Rs 79,000 crore will have a trickle-down effect on the plastic pipes segment which finds use in housing and construction.

Investment in logistics: The announcement that the Government has identified 100 critical transport infrastructure projects for last and first-mile connectivity for ports, will be undertaking investment of Rs 75,000 crore (incl. Rs 15,000 crore from private sources), and will promote coastal shipping for passengers and freight, through PPP mode shall help reduce logistics time and cost.

Revamped Credit guarantee scheme for MSMEs: The scheme will take effect from 1st April, 2023, with an infusion of Rs 9000 crore into the corpus. It will enable an additional collateral-free credit guarantee of Rs 2 lakh crore rupees, which will enable to lower cost of credit by 1 percent for the MSMEs. Since Indian plastics processors largely comprise of MSMEs, this is a welcome announcement.

Vivad se Vishwas II: The announcement that the Government will bring another dispute resolution scheme under Vivad Se Vishwas-II to settle commercial disputes will help MSME and trade resolve their issue urgently.

Ease of doing business: For the business establishments required to have a permanent account number, the PAN will be used as a common identifier for all digital systems of specified government agencies. This step will further help in the ease of doing business for the exporters.

Acid-grade fluorspar and Crude glycerin: The announcement that basic customs duty on acid-grade fluorspar and crude glycerin shall be reduced to 2.5% will enable the production of high-performance plastics as well as epoxy resins in India.

Higher customs duty on Naphtha, Styrene, Vinyl chloride monomer and Toys: The announcement that basic customs duty on naphtha, styrene and vinyl chloride monomer shall be increased to 2.5% would hurt the production of plastics raw materials in India. However, the announcement to hike basic customs duty on toys to 70% would support domestic toy manufacturers.

Mr. Rajiv Agarwal, Operating Partner (Infrastructure), Essar and Managing Director, Essar Ports

“The Union Budget 2023 is a significant one, continuing the trend towards more productive capital expenditure. It gives a major thrust to the transport infra sector. We welcome the provisions for ease of doing business which will help lay the foundation for big private investments in infrastructure development. An increased emphasis on promoting coastal shipping as low energy mode will be a critical enabler transitioning towards green growth. In addition, its higher capital outlay for Infra being hiked by 33% to Rs 10 lakh crore will reward the sector and counter global headwinds. The massive push on the capex spending and infrastructure development will go a long way in fulfilling the nation’s ‘AatmaNirbhar’ dream.”