The Update budget in 2022 should contain long-term measured aimed at these bottlenecks. Logistics industry companies are planning to use the Chinese logistics method for their infrastructure. Ceo of COGOS and Ravi Jakhar approaching this budget for the improvement of the future logistics industry, before pandemic threats arise.
Â On February 1 union budget of 2022-23, Nirmala Sitharaman (Minister of finance) presented a special relevance for the logistics sector, especially at the rise of omicron which is becoming a threat for the sector. It is also time to consider and evaluate the current FY. Revenue receipts at 73.5% at approximate, at the current GDP growth estimate. Total expenditure is at 60%, capital expenditure becoming a concern because it is lower, less than 50%. In the period of the pandemic, capital projects were unpredictable and did not live above the expectation, at the month.
According to the Logistics Skill Council, the Indian logistics sector is valued at $150 billion, contributing 14.4% of the country’s GDP. Road logistics market in India is expected to grow at a compound annual growth rate of 8 % in four years, and to reach $330 billion by 2025, says consulting firm Redseer.
Consulting firm Redseer said they are predicting to reach $330 billion by 2025.
2022 budget, the stakeholders in the logistics sector found the opportunity to nudge the government to take specific measures that can make it competitive against its Chinese counterparts. For years, Chinese logistics is focusing on boosting up their logistical infrastructure at an unprecedented pace. The focus has yielded a great surplus profit for the neighboring economy, which led to non-competitive positioning for Indian logistics players across the market. The budget of 2022 should contain long-term measured aimed at these bottlenecks.
The upcoming budget is expected to push reforms and increase supply chain efficiency to ultimately cut down logistics costs. Even Ravi Jakhar, chief strategy officer of all-cargo logistics said â€œthe government should allow funds for multi-modal for adopting green logistics, so there will reduce environmental impact. It should announce capital subsidies for constructing grade- a warehouse in a smaller town to support the development of efficient distribution centers. They are planning for more concrete proposals in the budget for building Agri-supply chains to support farmers.
Logistics competitiveness and infrastructure development will help the country turn into a global manufacturing center.
COGOS logistics platform expects from finance minister to address the sharp variability in GST rates across the states. â€œThere is a need to bring all energies and to reduce the cost of fuel. We expect a Credit Guarantee Fund Trust for Micro and Small Enterprises. (CGMST) expansion to new-age start-ups to provide a lesser cost working capital. Integration logistics looks forward to a comprehensive national logistics policy along with the Gati Shakti program. Said Prasad Sreeram, CEO of COGOS.
But, the government has planned to do extensive rail connectivity to ports. Rajan wants the government to complete these projects on a priority basis to reduce transportation costs and make our exports competitive. The industry is hoping that Sitharamanâ€™s much-anticipated budget would contain a turn of measures to enhance logistics competitiveness and infrastructure development to help the country turn into a global manufacturing center.