BSN Network / Mumbai
Monday, February 22, 2010

Kale’s logistics industry survey reveals wish-list for budget 2010-11; 92% industry players looking for greater investment in infrastructure, 88% demand Industry status

India’s Logistics sector, contributing about 13% to the GDP, is looking forward to the forthcoming union budget with heightened expectations.

The industry, which has developed into a key service sector helping majority of businesses (including FMCG, automobile, pharmaceutical among others) has set its pre-budget expectation wish-list. It is expecting greater government investment in infrastructure for facilitating efficient movement of goods, thereby sustaining industry growth. Given the massive contribution of the logistics sector to our economy, getting much-awaited ‘Industry’ status also tops the agenda for this budget. An ‘industry’ status would facilitate easier access to finance, robust regulatory mechanisms and a better image for the industry, reveals the survey. Few other expectations voiced by the industry from forthcoming budget include, among others, the following:

q 86% respondents feel there is requirement of more regulatory measures to reduce red-tapism, bottlenecks anddocumentation processes.

q Need for clarifications and rationalization regarding application and impact of Service Tax on logistics services is felt by 85% of survey respondents.

q 84% respondents feel suitable clarifications regarding classification of services and applicability of Service tax on various revenue elements should be issued.

q 82% respondents support greater FDI in key logistics infrastructure development areas like dredging, port connectivity etc. ·

q Requirement of Government support / concessions to improve adoption of IT in the industry and setting up of ‘IT Adoption Fund’ specifically for SMEs is expected by 77% of respondents.

These are findings of the survey instituted by Kale Consultants amongst logistics industry professionals.

This survey enabled respondents to voice the issues which are important for the industry and which they felt needed to be addressed in the forthcoming budget.

Commenting on the survey and its outcome, Mr. Sumeet Nadkar, Head-Logistics SBU, Kale Consultants Ltd said, “The pace at which logistics industry has transformed over last couple of years has been phenomenal. Logistics sector is now being recognized as an important feather in the cap strongly aiding economic growth. Budget 2010 is expected to be positive for the sector as various encouraging and positive policy initiatives are expected to be announced.”