Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, presented the Union Budget 2024-25 in the Lok Sabha on July 23, 2024.
This budget outlines a detailed strategy to enhance the logistics sector by improving infrastructure, providing access to capital, developing a skilled workforce, and creating a more robust operational environment.
Here are a few quotes from the shipping and logistics sector in response to the budget announcement. The positive responses from the industry leaders highlight the potential of the Union Budget 2024-25 to drive growth and innovation in the shipping and logistics sector, setting the stage for a more efficient and sustainable future.
Gayomard Driver – Executive Director & Group, Chief Financial Officer Jeena and Company
The logistics industry welcomes the 2024 budget and eagerly looks forward to its implementation. The budget addresses crucial aspects that the industry has been keen to see progress on – skilling of youth, empowering the MSMEs, manufacturing, and a comprehensive review of the rate structure for ease of trade.
The removal of duty inversion and reduction of disputes are significant positive steps. However, the main highlights are the continuation of focus on infrastructure i.e. the Rs 26,000-crore boost to road connectivity projects and the sanctioning of 12 industrial parks.
The establishment of the Gaya node along the Amritsar-Kolkata route is anticipated to greatly improve the Eastern Dedicated Freight Corridor. This development is expected to bring significant advantages to ports in eastern India over the medium term. India’s plan to establish dedicated e-commerce export hubs will streamline logistics, export clearances, and warehousing. These hubs, functioning as bonded zones, will reduce re-imports with private sector support.
Furthermore, the launch of Phase 4 of the PM Gram Sadak Yojana aims to provide all-weather roads to 25,000 rural habitats, enhancing connectivity. These numerous infrastructure improvements are anticipated to offer faster routes, more options for trade, increased connectivity to rural areas, and reduced costs of travel, sorting, and storing. They will also help reduce the turnaround time of delivery. Essentially, we can utilize smoother roads and shorter routes for transportation, moving away from the expensive and congested routes currently in use. Overall, we are optimistic about these announcements and their positive impact on the logistics sector.
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Vipin Vohra, Chairman, Continental Carriers Pvt Ltd
This year’s budget focuses on nine key priorities: agriculture, employment, human development, energy security, manufacturing, innovation, infrastructure, and next-generation reforms.
The rationalisation and reduction of customs duty on specific commodities such as gold, silver, platinum, and mobile phones and chargers are expected to boost both their export and import. The finance minister also assured a reduction in GST slabs. The logistics industry is hopeful for exemptions or reductions in export cargo duties for air and ocean freight.
To enhance industrial growth, the budget includes plans to develop industrial parks with complete infrastructure in or near 100 cities. Additionally, twelve industrial parks will be sanctioned under the National Industrial Corridor Development Programme, promoting ease of multi-modal transportation.
E-Commerce Export Hubs will be set up in public private-partnership (PPP) mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export related services under one roof.
Special emphasis on MSMEs and manufacturing sector with technology support package and reduction in TDS for e-commerce will further enhance the import/export to/from India.
Under the Prime Minister’s initiative for skilling, in collaboration with state governments and industry, 20 lakh youth will be trained over a five-year period. To achieve this, 1,000 Industrial Training Institutes (ITIs) will be upgraded in a hub-and-spoke arrangement with a focus on measurable outcomes. Additionally, the Model Skill Loan Scheme will be revised to facilitate loans up to Rs 7.5 lakh, backed by a government-promoted fund guarantee. This measure is anticipated to benefit 25,000 students annually.
To strengthen the Indian start-up ecosystem, boost entrepreneurial spirit, and support innovation, the angel tax for all classes of investors has been abolished. Additionally, this budget introduces a program to provide internship opportunities. Under this initiative, 1 crore youth will have the chance to intern with 500 top companies over the next 5 years. Interns will receive a monthly allowance of Rs 5,000 and a one-time assistance of Rs 6,000, funded through CSR initiatives.
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Yashpal Sharma, Managing Director, Skyways Group
The 2024 budget announcements present numerous opportunities for the Indian air cargo industry. The Indian freight forwarding community views the 2024 budget with a mixture of optimism and strategic planning, recognizing numerous initiatives that align with their aspirations for growth, efficiency, and global competitiveness. The huge allocation of 1.48 Cr crore in Skilling and Education will create a more skilled workforce bringing more efficiency to the Logistics Industry. The significant infrastructure investments will improve capacity building for all Logistics infrastructure in the country bringing further down cost of operations and quicker movement of goods. The relaxation in export-import periods for components sent for repair in the MRO industry can reduce aircraft downtime, which is beneficial for air cargo operations.
Financial support for new employees and MSMEs can bolster the industry’s human resources and supply chain. E-commerce hubs and leasing support will streamline operations and increase fleet availability. Tax reductions and higher disposable incomes can stimulate demand, and industrial parks will provide advanced logistics infrastructure.
Collectively, these measures are likely to drive substantial growth and development of the Logistics industry, positioning it for a more competitive and dynamic future.
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Vineet Malhotra, Co-Founder Director, Kale Logistics Solutions
The 2024 Indian Union Budget brings promising developments for the logistics sector with significant investments in infrastructure and the development of multi-modal logistics parks. These initiatives will enhance connectivity, reduce transportation costs, and align with the government’s vision of a robust logistics ecosystem, fostering efficiency, upskilling the workforce, and driving economic growth.
Furthermore, India’s Maritime Vision 2030 and Maritime Amrit Kaal Vision 2047 outline comprehensive initiatives to improve ports, shipping, and inland waterways, aiming to reduce vessel turnaround time and increase daily ship output. These visions reflect a commitment to growth and development in India’s coastal regions. At Kale Logistics Solutions, we are optimistic about these measures, which will undoubtedly strengthen supply chains in India.
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Kamal Jain, Director, Cargomen Logistics
The Budget 2024-25 aims to supercharge the logistics industry with a multi-pronged approach. Significant investments in infrastructure like Rs 26,000 crore for highways and Rs 2.66 lakh crore for rural infrastructure will create a more connected and efficient transportation network.
The development of 12 new industrial parks will establish strategic hubs to streamline supply chains. Financial support for small players is addressed through a credit guarantee scheme for MSMEs and an increased Mudra loan limit, making it easier for them to access capital for growth.
Additionally, reductions in custom duties on key equipment like mobile phones, chargers, PCBAs, gold, and silver will bring down operational costs. Recognizing the need for a skilled workforce, the budget allocates funds for skilling initiatives to ensure the logistics sector has the manpower it needs.
Finally, investments like Rs 11,500 crore for flood mitigation in Bihar and Rs 10 lakh crore for PM Urban Housing 2.0 will improve overall infrastructure resilience, indirectly benefiting logistics operations by minimising disruptions.
This budget creates a comprehensive plan to empower the logistics sector with better infrastructure, access to capital, a skilled workforce, and a more resilient operating environment.
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Satish Lakkaraju, CEO, Nexgen Logistics Pvt Ltd
The Current Budget has focussed on the states like Andhra Pradesh which have the largest coast line and the potential to bring the overall logistics cost down. The Budget has touched important aspects of Infrastructure and allocated Rs.11.11 lakhs crore for capital expenditure which will boost development and participation from the state government as well. Bihar will receive a substantial Rs. 26,000 crores as well and that will help in the development of key infrastructure projects along with the Visakhapatnam – Chennai Industrial corridor. The coastline of Andhra Pradesh and the development of the Industrial corridor will boost the logistics industry clearly as well.
