Budget 2023: Lower costs of logistics sector by implementing National Logistics Policy launched in 2022

The year 2022 was a year of recovery and growth for the Indian logistics industry with tangible signs of revival and resilience which is demonstrated in the growth of demand and supply across the country. The recovery was largely driven by demand from end-users for national and international customers. The government is doing a phenomenal job on all fronts, and its focus on improving the logistics industry is evident in various initiatives. The concern of high logistics costs to gross domestic product (GDP) is spoken about at length many times. To address it and to bring it down to the level of the developed world, we have a concrete plan in form of Gati Shakti and National Logistics Policy (NLP). All proposed initiatives under the policy are well thought-out and will fetch good results in the long run. Need for tangible benefits in sector What we look forward to in this Budget is some tangible actions for the benefit of the industry. Such benefits that we can see translated into cost savings or improved efficiency. Logistics and warehousing are interconnected and have a significant impact on each other, and a well-organized logistics system requires strategic management of procurement, transportation, storage, and dispatch of goods. With the growing complexity of logistics and warehousing challenges, it is important to balance growth expectations with inflation concerns. The momentum of growth of our country post-global pandemic cannot be undermined. The strengthening of the digital ecosystem with various initiatives under NLP, for faster communication and work, enhanced visibility, and transparency is very promising. To catalyse the master plan announced in the previous financial Budget, the NLP was much-awaited by the industry. We expect this Budget to focus on lowering the costs of the logistics industry, especially by implementing the National Logistics Policy (NLP) launched in 2022. Better infra and seamless movement can boost sector Presently, we see a critical demand to improve the infrastructure near the key warehousing zones across the country. Many practical examples are there, where big warehousing zones struggle with poor roads and huge traffic jams. Better infrastructure and faster and seamless movement in these zones will positively impact overall efficiency significantly. Rising cost of fuel and toll hurting industry Due to the rising prices in components like steel, which is 30-40 percent of the cost to build a grade A warehouse, fuel, and tolls which are more than 50-55 percent of the cost of transportation, the industry is finding it difficult to keep costs under control. For the scale of work that the country is undertaking, public-private partnerships (PPP) can be a win-win model. We need more maturity in PPP for building projects with better control and maintenance. This can also help in paving way for better fund availability for the mega projects. Another important area, which is there in the action plan, is skill development. As the industry is on the cusp of technology upgrades, there will be demand for a skilled workforce for the logistics industry in 2025 and beyond. Overall, I believe that with the right support and investment from the government, the logistics industry in India has the potential to reach new heights. I am hopeful that the upcoming Budget will address the pressing issues of the logistics industry such as infrastructure development, tax reductions, technology and automation, and government initiatives to promote growth. I believe that with the right policies in place, the logistics industry in India can achieve great heights and drive the economy forward. The writer is Chairman and Managing Director, V-Trans India Ltd (@vtransindia). Views expressed are personal Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.