Finance Minister proposes development of multi-modal logistics parks: Union Budget 2017

Feb 01, 2017: Presenting the Union Budget 2017-18 in the Lok Sabha today, Union Finance Minister Arun Jaitley proposed development of multimodal logistics parks. He said that an effective multi-modal logistics and transport system will make the economy more competitive. “A specific programme for development of multi-modal logistic parks together with multi-modal facilities will be drawn up and implemented.”

For 2017-18, the total capital and development expenditure of Railways has been pegged at Rs 1,31,000 crore. The Finance Minister allocated Rs 2.41 crore for the transport sector. This includes rail, roads and shipping. The budget allocation for National Highways has been increased from Rs 57,976 crore in 2016-17 to Rs 64,900 crore in 2017-18. Jaitley highlighted that 3,500 kms of railway track will be commissioned in 2017-18. Railways will implement end to end integrated transport solutions for select commodities through partnership with logistics players, who would provide both front and back end connectivity. Rolling stocks and practices will be customised to transport perishable goods, especially agricultural products. 2,000 kms of coastal connectivity roads have been identified for construction and development. This will facilitate better connectivity with ports and remote villages.

For the Shipping Ministry the allocation has gone up from Rs 1531 crore in 2016-17 to Rs 1773 crore. Rs 600 crores have been allocated for Sagarmala programme.

In his speech, Finance Minister said that select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode. Airport Authority of India Act will be amended to enable effective monetisation of land assets. The resources, so raised, will be utilised for airport upgradation.

Major players in the logistics industry have lauded the budget for placing heightened importance on the industry. Mayur Gandhi, Chief Financial Officer, Schenker India said, “The budget 2017-18 is partially growth oriented and is presented during the transition phase of an ongoing major tax reform “Introduction of GST”. The allocation of funds for infrastructure development will result into long term benefit for the economy. An overall allocation of Rs. 241,387 crores for the transportation sector is quite significant with specific novel idea of 2000 kilometers of coastal road connectivity. Some other ideas like Metro Rail Act, amendment in the Airport Authority of India Act for tier II cities airport upgradation and specific program on multi-modal logistics parks will support overall economic development.”

“The reduction of corporate income tax to 25 % for companies with turnover up to Rs. 50 Crores is supporting the SME companies though the expectation set was much higher. The efforts made for improved tax administration, faster tax assessments and removal of FIPB approvals support the objective of ease of doing business,” he added.