2023 Union Budget: Logistics sector looks at closing the digital gap that persists in the industry | The Financial Express

2023 Union Budget: Logistics sector looks at closing the digital gap that persists in the industry

With the upcoming 2023 Union Budget announcement, key players in the logistics industry and automotive stakeholders share their expectations.

2023 Union Budget: Logistics sector looks at closing the digital gap that persists in the industry

With the 2023 Union Budget announcement around the corner, the Logistics industry is expecting is further boost, as it flourished post-pandemic. The logistics industry plays a crucial role in the country’s development, and with the announcement of the Gati Shakti plans, the industry is looking forwards to the announcement. 

Here are what experts in the logistics segment have to say ahead of the upcoming 2023 Union Budget announcement:

Malay Shankar, CEO, ProConnect Supply Chain Solutions 

The New Labour Code directly impacts the blue-collar workers who are the backbone of the logistics and supply chain industry. Bringing in more straightforward means of enforcing it, while ensuring social security and economic benefit to the blue-collar workers will fetch long-lasting results. Getting rid of ambiguity and having simpler ways of implementation will help industrial workers. 

Coupled with the supportive Digital India policies, the government can thrust on closing the digital gap that persists in the industry. With lucrative sops for players bridging this gap by skill training to their workforce, the government can boost leaders in the space to catalyse the digital evolution of the sector. 

On the other hand, we hope the government will strengthen the foundation of the National Logistics Policy (NLP) and implement it to ease bottlenecks and reduce costs. Along with that, an improved road network will decongest roads, facilitate seamless transportation of goods and get better land value for the warehousing hubs. 

The sector is keenly looking at adopting greener practices. Offering tax benefits and incentives to the warehousing industry for deploying solar-enabled solutions and other green practices will go a long way in reducing the carbon footprint of the sector as a whole

Suresh Kumar R, Chief Executive Officer, Allcargo Logistics:

National Logistics Policy, Open Network Digital Commerce and the PM Gati Shakti are powerful programmes that recognise the importance of the logistics sector in realising India’s growth goals and ambitions on the world stage.

The covid disruption and increased realisation about the need for alternatives for manufacturing present a great opportunity for India. With a clear goal of lowering logistical costs, and an environment conducive for India to play a more prominent role across a wide range of sectors the budget presents an opportunity to power up, encourage and reward execution.

As global headwinds and demand slowdown raise concerns, it will be opportune for the budget to intensify the attractiveness of exports, assist imports of inputs vs finished products, and set the stage for Indian manufacturing to strengthen its global presence.

To accelerate India’s integration into the global supply chain, the capital allocation for the identified priorities and incentives for digital and technology adoption would be welcome.

Prasad Sreeram, Co-Founder and CEO, COGOS:

As a leading City logistics player, we have high hopes for the budget 2023. There’s a need to bring all energies and fuels under the GST umbrella to reduce the variations across states and reduce the cost of fuel. Second, we need support in creating green technologies in the country, like Fuelcell technologies along with Green hydrogen and EVs.

Third, we are looking at the faster implementation of the Unified Logistics Interface Platform (ULIP) as it would improve interoperability reduce cost and improve efficiency in the logistics sector, leading to a cleaner and more sustainable future for all.

Apart from the logistics sector, key automotive stakeholders have also given their expectations from the upcoming budget announcement:

Vikas Bajaj, President, AIFI (Association of Indian Forging Industry): 

All MSMEs, including the forging industry, are expecting a good, progressive and balanced budget this year. The industry also monitors significant announcements from this budget to promote investment in this space, as well as favourable regulatory actions to provide a suitable climate for the manufacturing sector. 

Additionally, steel import duties should be reduced to compensate for the existing deficit and uncompetitive Indian steel pricing. Furthermore, the government should prioritise regulating inflation and reducing the cost of raw materials and fuel. Existing incentives must be enhanced to boost exports. There is also a need to expedite the GST refund system to give liquidity to the industries. 

As part of the ‘Make in India’ initiative, Indian companies should be eligible for a duty structure benefit. The government has made continued efforts to simplify and streamline Indian tax regulations, and the industry anticipates consistency in tax and regulatory policies, as well as their interpretation, this year. I believe that the government should fix industry income rates for at least five years so that industrialists can make long-term financial plans and suitable investment decisions in their industries.

Ayush Lohia, CEO, Lohia Auto:

The Government of India (GOI) has introduced policies and regulations in the last decade to support the EV industry, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) program, which has been extended to 2024. To facilitate the expansion of enterprises specialising in green mobility, the industry still needs a unified strategy to encourage the EV sector across the country.

Incentives for infrastructure development, policies, and regulations to encourage battery swapping, including the FAME subsidy, should be given. To manage better costs and benefits customers, the tax (GST) regime on batteries and other components used in the production of electric vehicles should be 5% instead of 18%. Additional tax breaks for indigenous EV producers who create their products from the ground up will advance the “Make in India” movement. 

To boost the adoption rate, the retail financing of electric vehicles should come under priority lending. Electric 3-wheeler should also get Rs,15,000 per kWh incentive like electric 2-wheeler as the cost is one of the biggest hurdles and it can help smoothen the road by increasing penetration for electric 3-wheeler in India.

A special PLI programme for building charging infrastructure and a service-linked incentive programme for EV-related services might help hasten the establishment of an EV ecosystem in India. Government assistance in the form of tax breaks or incentives for EV-related research and development is also required.

Niraj Singh, Founder & CEO, Spinny

There has been a huge surge in used car sales over the past 4-5 years, owing to the increased preference for personal mobility and the stigma of owning a used car going away as the market is becoming more and more organized. The used car market has been traditionally dominated by the unorganized sector. However, over the past few years, the share of organized players has increased from 8% to 19%. 

Considering this, a reduction in GST rates will encourage efforts to bring transparency to the segment dominated by variables. Similarly, the Government should evaluate incentives such as allowing people to claim depreciation on vehicles, liberalize tax benefits and enable lower interest rates on capital, as this would not only motivate people to buy and upgrade cars. Such steps would not only contribute to the growth of India’s GDP but would also further organize the pre-owned car market. 

The new norms from the Ministry of Road Transport and Highways will encourage transparency, and address concerns regarding accountability and responsibility, creating a more level playing field between organized and unorganized entities. We are certain that the Government will introduce viable policy measures and significant initiatives in the upcoming budget that will help in propelling the industry.

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First published on: 26-01-2023 at 12:42 IST