The Finance Minister, Arun Jaitley, has presented a well-balanced and positive budget. We welcome the proposal of the National Logistics Portal as it will improve the transparency and visibility of cargo movement across the country.
Infrastructure is the growth driver of our economy. With a large number of players serving metro cities and cut-throat competition on price, many logistics companies are looking to build out their last mile capabilities in Tier 2 and below cities. These regions are still relatively underserved by logistics companies and have a booming middle class which is driving massive demand. With Digital India and bringing millions of Indians online, the rise of digital payments, dedicated marketing efforts of large e-commerce players, there is a big and growing e-commerce demand from regions beyond metros. On the multi-modal side, Bharatmala project is a positive development, coupled with eWay bill implementation which will result in faster turnaround times for on-road transportation.
With the announcement of 1.48 Lakh crore allocated to Railways, we hope that there is a thrust on improving freight logistics apart from better passenger connectivity. This will help the logistics industry drive up efficiency through rail networks in terms of costs and CO2 reductions as the current logistics movement is skewed towards road transport. The Government’s plan to expand its current 124 airports by five times seems skewed in favour of passenger movement, however, the development of airports across the board is a positive shift in building a robust logistics network. We expect that freight movement is given due cognizance as well.
The mass formalization of MSME sector will spur local manufacturing which will increase the need for logistics services across the board. It will boost the overall logistics sector, resulting in robust economic development. Since this is the last budget before the government goes on to elections, these announcements are welcoming, as they focus on strengthening Indian economy.
[Raaja Kanwar is Managing Director of Apollo Logisolutions Limited]