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Samir Shah, Chairman, FFFAI
At the background of present scenario of a weak world economy, aftermath demonetisation and an impending tax revolution called GST, the Federation of Freight Forwarders’ Associations in India (FFFAI) observes that the Union Budget 2017-18, presented by the Finance Minister on February 1, 2017, is a growth-oriented. According to Mr Samir Shah, Chairman, FFFAI, the Finance Minister’s forward looking announcements would definitely yield very positive results for the national interest of our country in the financial year 2017-18 and ahead.
The government has touched the vital area of the country’s economy in the rural area, both in the farm and non-farm sectors to double the income of the farmers by 2022. For FY 2017-18 total allocation for Agriculture and Farmers’ welfare has been announced Rs 35,984 crore. To connect rural economy with the major consumption centres in India and abroad, the pace of road construction has been announced to further accelerate, which is currently 100 kms per day.
FFFAI believes, the recent bold steps from the Government of India pertaining to fiscal discipline, restructuring of tax regime, capacity building through setting up of appropriate infrastructure and connectivity have further been strengthened by the Budge 2017-18 announcements. For instance, Budgetary allocation of Rs 2,41,387 crore for multimodal transportation sector; increase of allocation for highways from Rs 57,976 crore in 2016-17 to Rs 64,900 crore for 2017-18; identifying 2,000 kms of coastal connectivity roads for construction and development; more emphasis on agro- based produces through NABARD and appropriate logistics facilities for them; emphasis on MSME sector, port connectivity, Greenfield ports, airports in T-II & T-III cities through PPP mode, logistics parks, etc would have long-term and significant effects on India’s manufacturing and merchandise exports.
“On the other hand, the Finance Minister proposed suitable changes in customs and excise duty rates on certain inputs, raw materials, intermediaries and components along with certain other goods. The Finance Minister committed to simplify procedures, so as to reduce costs and improve competitiveness,” Mr Shah, pointed out.
FFFAI also commended the government’s decision to reduce multiplicity of taxes, associated cascading effects and cost of collection by abolish 13 cesses, levied by various Ministries.
“The Finance Minister has also highlighted the government’s decision to set up 1500 Multi Skill Training Institutes across the country. For these Rs 1,700 crore has been allotted for FY 2017-18. This shows the government’s firm commitment towards adding value to capacity building in a larger perspective,” Mr Shah added.
Mr Shah pointed out that FFFAI in its Pre-Budget Memorandum urged the Finance Ministry for addressing micro issues related to hassles in Customs Clearance. “We are optimistic that the Finance Minister’s commitments on Ease of Doing Business would resolve those in the days to come,” he maintained.
Adarsh Hegde, Joint Managing Director, Allcargo Logistics
“The Union Budget 2017 with an agenda to transform, energize and sanitize India is reasonably balanced for an inclusive growth of the Indian economy. A couple of initiatives announced in the Budget presented on Feb 1st bring some cheer to the sector. The government has taken the onus of setting up 100 India-International skill centres which will definitely create a larger impact to address the issue of skilled labour in India. Another good move of the government in the Budget to offer tax relief to corporates is the carrying forward MAT for additional 5 years. The bold target of 2500 crore digital transactions for 2017-18 will transform the way India transacts.
The implementation of end to end solutions by railways for some commodities and significant investment in development of national highways, are steps towards ensuring multimodal connectivity and better transport system. The Budget put forth some initiatives like the Metro Rail Policy, development of railways through investment of 1.31 lakh crores in 2017-18, development of coastal roads etc. that aim to create job opportunities and boost infrastructure, however, there is no much clarity. These initiatives are a ready welcome, given the logistics and transport sector’s dependence on road transport is high. The success of these projects lie in their efficient management and implementation.
While there are some positives for the sector in the budget, there are no remarkable announcements that the logistics sector can bank on. We were hopeful of some incentives and investments especially in coastal shipping, given that India has a coastline of 7500+ kms and has been one of the priorities of the government in the last few years. Initiatives to boost port modernization, development of industries and industrial corridors, seem to have been given a miss”
Areef Patel, Vice Chairman of Patel Integrated Logistics Ltd.
“The partnership of railways with logistics players for implementing end to end integrated transport solutions for select commodities is a definite game-changer for the domestic logistics sector and will usher in seamless movement of goods and services. The increase in budget allocation for highways and the identification of 2,000 kms of roads for boosting coastal connectivity will ensure increased connectivity with ports and far-flung villages, expanding the operational framework for logistical companies and improving last-mile deliveries at affordable costs. The move to develop strategically located multi-modal logistics parks with multi modal transport facilities has the potential to make our economy globally competitive. All said and done, efforts need to be expedited to bring the largely unorganized domestic logistics sector within the organized structure while efforts need to be intensified to digitize the operations of the domestic logistics industry, which remains largely cash-intensive.”
Abhishek Chakraborty, Executive Director, DTDC Express Limited
‘’We welcome the budget as it is optimistic and puts forth a realistic roadmap which focuses on sustainable economic growth. The big advantages are investment of INR 3.96 lakh crore in the Infrastructure sector and 2.41 lakh crore for transportation modes (including road, railways and shipping) which would help in reducing the logistics costs and increase trade. In addition to this, the budget also emphasized to initiate specific programme for development of multi-modal logistics parks, together with multi modal transport facilities which will further contribute to the growth of the industry.’’
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