A majority of logistics players are of the opinion that infrastructure in the country needs to be improved manifold for facilitating smooth movement of goods With the Union Budget 2010-11 round the corner, Topping the wish list of the sector, as expressed by 92% respondents, is increased government investment in the infrastructure sector for facilitating efficient movement of goods, thereby sustaining industry growth. The industry, which has developed into a key service sector by helping majority of businesses (including FMCG, automobile and pharmaceutical, among others) is also expecting the much awaited ‘industry’ status. This demand comes a close second in the wish list, with 88% respondents voicing their opinion for the same. An ‘industry’ status would facilitate easier access to finance, help in creating robust regulatory mechanisms and a better image for the industry, as revealed the survey. Few other expectations voiced by the industry for the Budget include, among others, the following: · 86% respondents feel that there is a need for more regulatory measures to reduce bottlenecks and documentation processes · 85% feel that there is a need for better clarity and rationalisation regarding application and impact of service tax on logistics services · 82% respondents support increased FDI in key logistics infrastructure development areas such as dredging, port connectivity etc · Requirement of government support/concessions to improve adoption of IT in the industry and setting up of an ‘IT Adoption Fund’ specifically for SMEs has been voiced by 77% respondents Industry players are of the opinion that logistics and transportation, along with infrastructure development, must be provided increased impetus and support by the government in order to achieve the economic growth envisaged. Unless costs involved in logistics and transportation are reduced substantially, the same will retard economic growth. They also believe that apart from support to all players and particularly to SMEs in these areas, there should be an accentuated emphasis on training of personnel and adoption of IT for logistics, transportation, management of infrastructure and communication requirements. A top management professional from Mumbai-based LSP emphasises that technology adoption can provide much needed impetus to the sector and aid its growth. “Progress of the logistics sector lies in greater adoption of IT, which acts as a key to smoothen business operations and assists in attaining the long-term objectives. Industry colleagues should view IT as a partner rather than a facilitator. IT would be the key differentiator when it comes to differentiating between a leading logistics firm and that of an ordinary one.” Given the massive contribution of the logistics sector to our economy, these industry expectations should definitely be considered in the Budget. The pace at which the logistics industry has transformed over the last couple of years has been phenomenal. The logistics sector is now strongly aiding the country’s economic growth. Budget 2010-11 is expected to be positive for the sector as various encouraging and positive policy initiatives are expected to be announced. Excerpts from a report by Kale Consultants, a leading solutions provider to the global Airline, Logistics and Travel (ALT) industry |
