Budget 2023: Logistics sector hopes for more incentives towards NLP, focus on digitisation, ESG infrastructure | The Financial Express

Budget 2023: Logistics sector hopes for more incentives towards NLP, focus on digitisation, ESG infrastructure

The logistics industry is hoping the Budget to allocate more funds to initiatives like NLP and to propose measures to strengthen the logistics and supply chain management infrastructure. There are also demands for focus on air cargo which will ‘ensure seamless freight movement in and from India’.

logistics, supply chain, Union Budget, Budget 2023, ULIP, National logistics policy, ESG, infrastructure, funds, EV, sustainability, digitization, public procurement policies, GDP target, Nirmala Sitharaman, finance minister, India Post, railways
Logistics sector expects that it will announce incentives that will further facilitate the growth of the industry. Image: Reuters

With the country all set for Finance Minister Nirmala Sitharaman to present the Budget 2023 in Lok Sabha at 11 am today, the logistics sector expects that it will not only announce incentives that will further facilitate the growth of the industry but also prioritise the improvement of logistics infrastructure across roads, warehouses and ports among others. Following the announcement of the National Logistics Policy (NLP) the previous year, the industry is hoping the Budget to allocate more funds to such initiatives and to propose measures to strengthen the logistics and supply chain management infrastructure. There are also demands for focus on air cargo which will ‘ensure seamless freight movement in and from India’. 

In addition, the logistics industry players are betting on announcements that will make the supply chain digital and paperless in the coming time. ESG is another area in focus and the sector is hoping for concessions for EV infrastructure installations. “ESG has direct implications for the logistics sector. The government may consider introducing concessions for EV infrastructure installation, such as charging stations in addition to concessions for new EVs which can expedite the adoption of EVs for commercial purposes and speed up its presence in the last-mile delivery services,” said Yogesh Patel, CFO, Mahindra Logistics Ltd.

Here is what few of the logistics firms expect from the upcoming Budget.

Yogesh Patel, CFO, Mahindra Logistics Ltd

The announcement of the National Logistics Policy has clearly laid out the direction to improve efficiency and transparency of operations. Multiple interventions across the logistics ecosystem, that the National Logistics Policy defines, should be adequately funded by the budget so that its effects can be seen in the years to come. One of the focus areas for the budget can be on enhancing transparency and visibility, which can be attained through the Unified Logistics Interface Platform as and when it is integrated into the system. We anticipate that the budget will prioritise strengthening the infrastructure for logistics and related services and advancing connectivity initiatives in various economic zones thus creating an enabling environment for reducing logistics costs and times and boosting productivity and economy.

Kami Viswanathan, Senior Vice President, FedEx Express, Middle East Indian Subcontinent and Africa (MEISA) Operations

While the National Logistics Policy will be pivotal to the development of the logistics and supply chain ecosystem, FedEx recommends a special focus on air cargo. The development and expansion of airports to meet the rapidly growing demand for air cargo capacity and digitized systems to streamline surging cross border shipments, will be essential to ensure seamless freight movement in and from India. FedEx recommends allowing all categories of export and import shipments through express mode. We also recommend eliminating value and weight restrictions for clearance under courier regulations. This will further boost exports from India. Furthermore, we recommend the implementation of zero rating of Goods and Services Tax for all international transportation services. 

Anil Verma, Executive Director & CEO, Godrej & Boyce

The Government made a strong thrust towards investments in infrastructure for the current year through its Gati Shakti programme. It focussed on logistics in order to improve our competitiveness in the global markets. Another objective was to generate employment and attract supporting investments by the private sector. The push for EVs is generating investments in the sector with a number of new entrants to serve the market. It will greatly reduce our dependence on oil imports while delivering against our commitments towards reducing global warming and creating a sustainable economy. However, the success of this will depend upon the creation of an enabling environment through the development of a vehicle charging infrastructure as well as a cheap and reliable supply of electricity. The Green Hydrogen Mission will also help us in this journey by creating energy sources which are not dependent on fossil fuels. 

Soham Chokshi, CEO and Co-founder, Shipsy

National Logistics Policy has been a landmark development in mobilizing the power of digitization to improve the state of logistics in the country. The budget will most likely be aligned to augment it through concerted efforts. This entails more investments in connectivity projects and building logistics infrastructure in various economic zones, especially under the PPP model, to expedite the execution of these. In addition, India’s last-mile emissions per delivery being higher than the global average is an area that needs immediate attention. Reducing miles travelled per package and ensuring that the distance is covered through eco-friendly modes can help lower carbon emissions. So generous incentives for the deployment of EVs in deliveries backed with stringent policies can prove critical to addressing climate change concerns.

Yash Jain , Co-Founder and CEO, NimbusPost 

The Indian logistics industry needs shorter delivery timelines which can be achieved with the use of advanced technology. Plus, the technology should be available at economic rates so even small-sized brands can leverage the latest tech for a superior logistics experience. The industry is in dire need of world-class infrastructure, electric vehicles, IT implementation, decongestion of roads, road/port capacity expansion, lower fuel cost, more logistics parks, improved warehousing and automation, and transparency in govt policies.

Vidit Aatrey, Founder & CEO, Meesho

Budget 2023 gives our visionary government an opportunity to put our MSMEs in the fast lane, building on its proactive efforts to transform the small business economy. First, the government can bolster working capital for e-commerce suppliers by lowering GST on input services like logistics and facilitating refunds of accumulated input tax credit. Second, expediting the implementation of GST relaxation norms for small online businesses will allow millions of them to realize their full potential. Further, with the National Logistics Policy bringing down costs for the ecosystem and strengthening distribution networks, the government could leverage the unmatched reach of India Post and Indian Railways to help our MSMEs meet rising e-commerce demand from small towns and villages in a fast and reliable manner.

Imthiaz, CEO and Co-Founder, RAAHO 

The Budget 2023 is anticipated to cover several key areas of development for the logistics industry in order to boost growth and achieve the desired 10 per cent cost share per GDP target set by the Union Government. State-led initiatives for development of logistics infrastructure, such as multi-modal logistics parks, with public-private partnerships working together is another urgent requirement, along with reforms in public procurement policies. The government should also consider providing capital subsidies for the construction of grad-A warehouses in smaller towns. There is an urgent need for the government to make provisions for and promote digitisation within the logistics industry, only 2 per cent of which is digital. 

Zaiba Sarang, Co-founder, iThink Logistics

The expectations of the logistics industry revolve around allocating resources to make this unorganized sector more organized. The one policy that was in the spotlight during the previous year was NLP which was introduced to make India a global logistical hub. In addition, we envisage initiatives that will make the supply chain digital and paperless in the coming time. We believe that efforts should be made to make this sector more sustainable in the future, which could be accomplished by investing in electric fleets, using less carbon-emitting fuels, and encouraging technological adoption to optimize the logistical route and reduce operational costs. 

Anshuman Singh, MD & Chairman, Stellar Value Chain Solutions

Launch of the National Logistics Policy (NLP) reflects the government’s intention to improve logistics infrastructure, lower costs, and increase operational efficiency. Following the announcement of the National Logistics Policy (NLP), the industry expects the Union Budget to propose measures to strengthen the logistics and supply chain management infrastructure to boost connectivity across the country, thereby building a framework capable of reducing logistics costs and transit time. As the consumer and e-commerce sector and D2C segments have redefined the logistics performance metrics with the introduction of time and cost-efficient delivery, the union budget should propose incentives to encourage digitisation and data-driven tech adoption. The government in the upcoming budget should also propose incentives in terms of capital subsidies for encouraging private investments in setting up grade-A warehouses at key logistics hubs in tier-II or tier-III towns.

Raaja Kanwar, Chairman and Managing Director, Apollo Supply Chain and Apollo International Limited

We are expecting the Union Budget to assign adequate funds to key initiatives under the NLP that will improve the first and last-mile connectivity for the seamless multimodal movement of goods. Another key area imperative for fast-tracking economic growth is the prioritization and allocation of funds towards digital adoption through platforms like ULIP and E-Logs that bring visibility, predictability, and improve the overall logistics services in India. Additionally, the budget should incorporate ESG parameters when structuring incentives. 

JB Singh, Director, MOVIN Express Ltd

The National Logistics Policy has made tremendous progress in utilizing platformization and the power of digital transformation to dismantle industry silos. It is anticipated that the upcoming union budget will advance it by strengthening the framework for its successful execution and lowering logistics costs. We believe that this budget will successfully strike a careful balance between the need for economic development and inflationary worries. Additionally, there will be a big push in digital technology to streamline the customer interface for the logistics industry.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 01-02-2023 at 10:03 IST