Logistics Budget in 2020LogYcode
The Union Budget for FY 2020 is underway to be presented on 01 February 2020. While the finance minister has the agenda lined up, the common man and every sector have their own expectations from the Budget. The most probable aspects that might get addressed in the budget has to be reformed in GST laws, revision of tax slabs, tax cut for the MSMEs (partnership firms, LLPs) along with corporates and new manufacturing companies, sector-specific incentives and so on.
Amid the flurry of agenda and expectations, the logistics sector in India and the fraternity is also awaiting the announcement of the National Logistics Policy in the forthcoming budget. The stakeholders of the logistics sector look forward to the Piyush Goyal led Ministry of Commerce and the Special Secretary for logistics, Mr N Sivasailam who are already instrumental in insisting a Cabinet approval for the same.
The logistics sector is a fast-growing sector and one of the biggest contributors to the GDP which stands at an approx. $30 billion. Also, the sector boasts of the most employment opportunities. In view of the vast scope of the industry, the idea is to bring down the high logistics costs from 14% to 8-9% of the GDP any sooner and take measures for seamless movement of goods and thereby enhance trade. Currently, the sector is largely unorganized and disintegrated. Unlike the present scenario, there needs to be a common digital platform and a single-window for the stakeholders for approvals and authorizations from the government bodies like FSSAI, ADC, AQCS, Customs, etc.
The GST laws should exempt the whole supply chain facilitating a smoother global trade. The sector-specific incentivization should address incentives to the Textile Industry as we are losing out on the global demand for commodities like garments to other countries like Bangladesh, Vietnam. The Government should also promote the start-ups and companies who are venturing into developing digital platforms for ‘ease of doing business’ in the supply chain, with incentives and short-term loans. The logistics service providers and freight forwarders ought to be empowered with short-term loans and ease and access to Trade Finance.
In addition to the above the Government needs to expedite the completion of the pending projects related to the logistics and supply chain infrastructure, multi-modal connectivity, warehousing, freight hubs and so on as a major step towards reducing the logistics costs.
It is a fact that Logistics is a huge market and expected to reach the size of $215 billion in coming two years and the numbers will only improve with the proposed and planned reforms. We look forward to a fruitful Budget 2020.