Andhra Pradesh logistics sector seeks sops in Budget

Visakhapatnam: State industry bodies expect to see a lot of sector-specific policies, and better representation of their issues, apart from increased allocation and tax sops in Union Budget 2018-19 to boost industries.

They demand increased allocation and clarity in execution in Union Budget regarding transportation and infrastructure projects to provide a boost to the logistics sector. The cost of logistics in India is higher as compared with the US and China.

“India can save close to $50 billion if logistics costs drop to 9 per cent of GDP from 13 per cent now. This would also bring down the prices of products,” said G. Sambasiva Rao, president of AP Chambers of Commerce and Industry Federation. 

The government had initiated several public-private infrastructure projects with major players. This has led to faster execution, creation of a stable ecosystem, and a boost to the job market and the economy.

The Union Budget for 2017-18 earmarked '2.4 lakh crore for the transport industry, of which '1 lakh crore was for the railways, and '64,000 crore for national highways. The recognition of logistics with industry status was a major milestone for the sector. 

The government has been bullish on reforming the logistics and infrastructure sector, which was evident from the 10 per cent increase in transport infrastructure budget allocation in 2017-18. In addition, funds were allocated for the Sagarmala project to build multimodal logistics parks, and to develop coastal roadways.

“At the same time, the government should expedite major infrastructure projects like Sagarmala, Bharatmala, the eastern and western dedicated rail-freight corridors to help improve the country’s logistics facilities,” Mr Rao suggested. 

“In 2016-17, Indian ports handled 8.4 million twenty-foot equivalent units (TEUs) in containerised cargo traffic. However, China has four ports that can handle more than 20 million TEUs. To address this gap, the projects under the ambit of Sagarmala would need to be fast tracked,” he added. While logistics industry would get many direct benefits, transportation projects would aid companies by reducing costs, increasing transit  speeds. 

Cold chain sector needs facilities

The cold chain sector expects a lot in the forthcoming Union Budget. There has been a good development in the sector in the past few years due to the positive support from the government through its incentive schemes. 

As per India Society of Heating Refrigerating and Air conditioning Engineers (ISHRAE), there are many issues that need to be looked into.   

Arvind Surange, former president of ISHRAE, said: “To match the needs for a large country like ours, the cold chain sector will need creation of multi product cold stores, ripening units near consumption centres, special agro-unit zones with most reasonable land prices. Electrical power is the major operational input for cold chain. Special concessional tariff should be created for all projects.” He also demanded to add insulated sandwich panels to zero GST category.