With Finance Minister Nirmala Sitharaman set to present the interim budget for 2024-25 on February 1, the logistics industry is expecting measures to propel the country’s logistics sector towards innovation, efficiency and global competitiveness.
Given that the global economy is reeling under several supply chain issues, the upcoming budget holds great importance. The logistics industry says it will play a crucial role in addressing the challenges of rising trade costs and global turbulence. They also affirm that the government’s substantial capital expenditure on infrastructure, particularly in roads, railways and airports, has already energised the sector. The prioritisation of logistics infrastructure development has enthusiastic support.
Ayesha Katgara, Head of Corporate Strategy at Jeena & Company, an end-to-end logistics and supply chain solutions provider, anticipates that the budget will prioritise specific key areas – accelerated infrastructure development fuelled by the Gati Shakti masterplan, with its promise of multi-modal hubs, dedicated freight corridors and inland waterways. “Beyond mere infrastructure, the industry needs a tech boost, leveraging AI to streamline customs, automate warehousing, and optimise every facet of the supply chain. However, technology is most effective in the hands of a skilled workforce. Therefore, investing in workforce skilling becomes crucial, not just for filling gaps but also establishing talent pipelines in AI, supply chain management, and last-mile solutions,” she says.
Further, logistics players’ wish list includes the rationalisation of Goods and Services Tax (GST) rates to ensure a simplified and more transparent system. Currently, GST has multiple tax slabs, which can be confusing and burdensome for businesses. Mahesh Fogla, Executive Director, Patel Integrated Logistics Limited, highlights that GST notices are issued nationwide to meet the timeline without any application of mind. He suggests that no penalties should be imposed on new businesses for the first three years of GST implementation, to give businesses enough time to comprehend the law. “Furthermore, within TDS, streamlining more than 36 rates is necessary to improve the business environment,” says Fogla, adding it is imperative to support MSMEs by considering a 20% increase in the GST threshold limit for services (from 20 lakhs) and goods (from 40 lakhs), factoring in inflation. By streamlining and reducing the number of tax brackets, it would not only make compliance easier but also promote economic growth, logistics players say, adding that a rationalised GST structure would help eliminate cascading taxes and encourage investment and consumption. “We expect rationalisation of GST rates, especially for warehousing and cold chains, eased compliance burdens, and clear regulations for the emerging gig workforce. Finally, the budget must orchestrate collaboration between various stakeholders — ports, railways, airlines, and e-commerce giants — through public-private partnerships and an inter-ministerial task force,” adds Katgara.Other stakeholders stress the importance of improving the ease of doing business and reducing tax pressure.Nikhil Agarwal, President, CJ Darcl Logistics Ltd, expects the budget to push sustainability, fostering policies encouraging the adoption of electric vehicles (EVs), alternative fuels, and strategic incentivisation. According to Agarwal, taking a comprehensive approach to these initiatives will enhance environmental stewardship and establish the industry as a global leader in eco-friendly logistics solutions, aligning with India’s goal of achieving net-zero emissions by 2070.
Given that the global economy is reeling under several supply chain issues, the upcoming budget holds great importance. The logistics industry says it will play a crucial role in addressing the challenges of rising trade costs and global turbulence. They also affirm that the government’s substantial capital expenditure on infrastructure, particularly in roads, railways and airports, has already energised the sector. The prioritisation of logistics infrastructure development has enthusiastic support.
Ayesha Katgara, Head of Corporate Strategy at Jeena & Company, an end-to-end logistics and supply chain solutions provider, anticipates that the budget will prioritise specific key areas – accelerated infrastructure development fuelled by the Gati Shakti masterplan, with its promise of multi-modal hubs, dedicated freight corridors and inland waterways. “Beyond mere infrastructure, the industry needs a tech boost, leveraging AI to streamline customs, automate warehousing, and optimise every facet of the supply chain. However, technology is most effective in the hands of a skilled workforce. Therefore, investing in workforce skilling becomes crucial, not just for filling gaps but also establishing talent pipelines in AI, supply chain management, and last-mile solutions,” she says.
Further, logistics players’ wish list includes the rationalisation of Goods and Services Tax (GST) rates to ensure a simplified and more transparent system. Currently, GST has multiple tax slabs, which can be confusing and burdensome for businesses. Mahesh Fogla, Executive Director, Patel Integrated Logistics Limited, highlights that GST notices are issued nationwide to meet the timeline without any application of mind. He suggests that no penalties should be imposed on new businesses for the first three years of GST implementation, to give businesses enough time to comprehend the law. “Furthermore, within TDS, streamlining more than 36 rates is necessary to improve the business environment,” says Fogla, adding it is imperative to support MSMEs by considering a 20% increase in the GST threshold limit for services (from 20 lakhs) and goods (from 40 lakhs), factoring in inflation. By streamlining and reducing the number of tax brackets, it would not only make compliance easier but also promote economic growth, logistics players say, adding that a rationalised GST structure would help eliminate cascading taxes and encourage investment and consumption. “We expect rationalisation of GST rates, especially for warehousing and cold chains, eased compliance burdens, and clear regulations for the emerging gig workforce. Finally, the budget must orchestrate collaboration between various stakeholders — ports, railways, airlines, and e-commerce giants — through public-private partnerships and an inter-ministerial task force,” adds Katgara.Other stakeholders stress the importance of improving the ease of doing business and reducing tax pressure.Nikhil Agarwal, President, CJ Darcl Logistics Ltd, expects the budget to push sustainability, fostering policies encouraging the adoption of electric vehicles (EVs), alternative fuels, and strategic incentivisation. According to Agarwal, taking a comprehensive approach to these initiatives will enhance environmental stewardship and establish the industry as a global leader in eco-friendly logistics solutions, aligning with India’s goal of achieving net-zero emissions by 2070.
Agarwal also expects the budget to outline robust measures for promoting multimodal connectivity. He adds policies aligning with the National Logistics Policy will act as a linchpin, rationalising supply chains, nurturing ingenuity, and amplifying interconnectivity. “Investments in skilling labour, including the establishment of more training centres for drivers, will enhance the industry’s human capital, ensuring a skilled workforce capable of navigating the evolving landscape,” he adds.
