Union Budget 2018: Where will Indian Logistics be heading?

( Excerpts of an analysis by Kale Logistics)

The Indian Finance Minister Arun Jaitley, presented the fifth straight budget on 1st February 2018. While the focus was mainly on agriculture, the budget did address the rural sectors, new health insurance schemes and provided some income tax relief for the salaried class and senior citizens. The Logistics industry also received attention with several targeted incentives.

Citing infrastructure as an important growth driver of any economy, an amount of INR 1.48 lakh crore was allocated for Railways. In a statement targeting the development of rail networks across the country, the FM cited that capacity expansion shall be the priority. With a proposed target of doubling 18,000 km of lines and said gauge conversion underway to eliminate capacity constraints, measures will also be employed to enhance the capacity of rail networks. New world-class trains and dedicated freight corridors were being developed. The minister also pointed out that 600 stations have been earmarked for modernisation by the railways. Rail ministry is also working on an ambitious scheme to allow private operators to set up their own rail lines and run trains.

NextGen Airports for Bharat to boost airport capacity were underway. Thelatest budget supported impetus to aviation by encompassing airport capacity expansion by 5 times to handle 1 billion trips a year. The proposed improvement in the aviation sector is expected to affect the air cargo domain by providing the much needed infrastructure and space to cater to rising air cargo volumes.

The country’s exports are expected to grow by 15% during the current fiscal. Industry experts predict that 5% increase in exports is quite possible as buoyancy in commodities and crude will push value wise exports. In fact, in the mid-term review of the foreign trade policy in December2017, the government doled out incentives worth INR 8,450 crore to boost exports and employment in labour intensive sectors that were hit by the Goods and Services Tax (GST) roll out.

Ambitious Bharatmala Pariyojana has been approved for providing seamless connectivity of interior and backward areas and borders of the country, to develop about 35000 kilometres in Phase-I, at an estimated cost of INR 5,35,000 crore.

Department of Commerce will be developing a National Logistics Portal as a single window online market place to link all stakeholders.It proposes to link all the seven Ministries, including Shipping, Road Transport and Highways, Railways and Civil Aviation, to significantly benefit the logistics industry.

Allocation to Digital India scheme doubled to INR 3073 cr. 5 lakh Wi-FiHotspots have been proposed to provide Broadband access to 5 crore rural citizens, at the cost of INR 10,000 cr, thus encouraging digital connectivity across the country.

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