Government Focus On Multi-Modal Connectivity To Boost Logistics Sector, Say Ind Players

The government's drive to encourage integrated logistics and multi-modal connectivity is definitely a positive move towards the progress of the logistics industry in India, industry executives and experts said.

Finance Minister Nirmala Sitharaman in her Budget speech on Tuesday said the PM Gati Shakti National Master Plan is a transformative approach for economic growth and sustainable development and is driven by seven engines: roads, railways, airports, ports, mass transport, waterways and logistics infrastructure.

All seven engines will pull forward the economy in unison, Sitharaman said while presenting the Budget for 2022-23.

These engines are supported by the complementary roles of energy transmission, IT communication, bulk water and sewerage and social infrastructure.

"The government's drive to encourage integrated logistics and multi-modal connectivity is definitely a positive move towards the progress of the logistics industry in India. In terms of infrastructure, there is a notable change in transportation with the development of highways.

"The new proposed measures under the PM 'Gati Shakti' plan for expanding the National Highway Network by 25,000 km in 2022-23 will further boost logistics connectivity and improve last-mile deliveries," said Vivek Chopra, Acting CEO – Cluster India and Indian Sub-Continent, DB Schenker.

V S Parthasarathy, Vice-Chairman Allcargo Logistics Ltd, said the budget is clear on both growth drivers and health checks and places long term thrust on development.

"With big Capex infusion, macro push to key sectors like infrastructure, Finance Minister Nirmala Sitharaman has walked the expected lines to the fine balance between the spending and fiscal deficit while going all out to maintain the momentum of growth."

The PM Gati Shakti will get more firepower with higher allocations across the board to propel all related sectors, Parthasarathy said.

According to Anshul Singhal, Managing Director, Welspun One Logistics Parks, the focus on multimodal connectivity through the PM Gati Shakti gives us more confidence to invest in the sector and build logistic parks.

Rampraveen Swaminathan, MD and CEO, Mahindra Logistics, said, "With an outlay of Rs 20,000 crore via financing, the expansion of the national highways network by 25,000 kilometres in 2022-23 will provide a much-needed boost for smoother and faster logistics transportation."

Additionally, the announcement of Indian Railways developing new products and efficient logistics services will provide a big boost for farmers, small and medium enterprises, he added.

"Public investment to modernise overall infrastructure in the Nation is expected to enable efficient logistics and boost manufacturing. With plans to develop 100 PM Gati Shakti cargo terminals in the next three years, the government has formulated an exceptional vision to boost EXIM competitiveness, which will help accelerate the economy and create more jobs and opportunities for the youth,” said Rajiv Agarwal, Operating Partner (Infrastructure) - Essar and Managing Director - Essar Ports.

Anshuman Singh, Chairman & Managing Director, Stellar Value Chain Solutions, said, "The budget aims to make economic revival sustainable and inclusive by proposing enhanced capital expenditure, initiatives to boost digitisation and domestic manufacturing. Amid domestic challenges and global headwinds, it has proposed ways to develop an effective framework for future growth."

Arindam Guha, Partner & Leader, Government & Public Services Deloitte India, said, "the Gati Shakti initiative features at the center stage of Budget 2022-23, highlighting the importance of quality multi-modal transport in achieving overall cost competitiveness.

With global studies pegging India's average logistics costs at around 14 per cent of GDP as against 8-9 per cent for advanced economies, this is clearly a factor which needs to be addressed for attracting quality anchor investors across sectors, he said.

In addition to significantly increasing the outlay for multi-modal infrastructure development, the Budget has also called out technology as a key enabler not only for timely completion of projects but also streamlining logistics related regulatory processes, Guha stated.

"Focus on green logistics by supporting the EV market and addressing energy transition and climate action and financing of investments in this space is a brilliant step," said Ashish Agarwal, Director & CEO at Seros Logistics.

Stating that the announcement of 'One station, one product' will help the supply chain of local products, Tanmay Kumar, Chief Financial Officer, Shiprocket, said the budget has focused on the development of infra projects which will boost the logistics system in India.

Lancy Barboza, MD,Flomic Global Logistics Ltd said that the massive thrust on capex, strengthening the infrastructure and policies to support the survival and growth of MSME have been some of the key focus areas of the budget 2022-23.

Creation of jobs, stronger push for digital education, greater focus on mental health wellbeing, and readiness for new-age technologies such as blockchain and 5G services, we believe are all steps in the right direction, said Soham Chokshi, Founder-CEO, Shipsy.