Union Budget 2025 for Logistics Sector

1. MSME Manufacturing: The National Manufacturing Mission will be set up. This will cover small, medium, and large industries. The scheme may help in providing employment for around 22 lakh individuals and the turnover that may be generated is Rs.4 lakh crore.

Union Budget 2024-25 for Logistics Sector

The highlights for Union Budget 2024-25 for the Logistics Sector are listed below:

The Union Budget 2024 prioritizes job creation with Rs.2 lakh crore allocation. It aims to generate 4.1 crore jobs through youth skilling initiatives. Economic inclusivity for women is promoted through plans for working women hostels and creches, supported by an allocation exceeding Rs.3 lakh crore for women and girls' welfare.

Infrastructure development receives a significant boost with Rs.11.11 lakh crore allocated, encouraging state and private sector participation to enhance economic growth. Bihar is slated to receive Rs.26,000 crore for key infrastructure projects, including highways, power plants, airports, and medical colleges to boost regional development. Reforms in aviation and shipping extend export periods and enhance Maintenance, Repair, and Overhaul (MRO) activities, geared to improve industry competitiveness and employment.

Initiatives like the Jan Vishwas Bill 2.0 and digitalization efforts across states are set to enhance the ease of doing business and improve regulatory environments for businesses. MSMEs benefit from a new credit guarantee scheme that facilitates collateral-free term loans. Additionally, the budget increases Mudra loan limits and establishes e-commerce export hubs to support their growth.

Introduction of Economic Railway Corridor Programs

1. Nirmala Sitharaman announced the initiation of three significant economic railway corridor programs, including energy, mineral, and cement corridors, port connectivity corridors, and high-traffic density corridors.
2. These corridors were identified under the PM Gati Shakti initiative to facilitate multi-modal connectivity, with the aim of enhancing logistics efficiency and reducing overall costs.
3. Alleviating congestion in high-traffic corridors is expected to enhance the operations of passenger trains, ensuring safety and increasing travel speeds for passengers. 
4. These economic corridor programs, in conjunction with dedicated freight corridors, are poised to drive GDP growth and reduce logistic costs.

Upgradation of Normal Railway Carriages to Vande Bharat Standards

1. The Finance Minister highlighted the plan to upgrade normal railway carriages to adhere to Vande Bharat standards, ensuring enhanced safety, convenience, and comfort for passengers.
2. Approximately forty thousand regular rail carriages will undergo conversion to meet these standards, aiming to improve the overall passenger experience.

Logistics Sector Key Expectations from the Union Budget 2024-25

1. Prioritise Transparency and Traceability:

1. In preparation for Budget 2024-25, there is a pressing need to prioritise transparency and traceability in the logistics sector.
2. One key aspect is the implementation of open data platforms and real-time cargo tracking systems, particularly in sensitive regions like the Red Sea.

1. These technologies will not only improve transparency but also build trust among stakeholders by providing accurate and timely information.
2. Another crucial step is to advocate for standardised data formats and protocols across the logistics industry to facilitate seamless information exchange and enhance international collaboration.
3. Encouraging the adoption of uniform standards will streamline communication and boost overall efficiency.
4. Lastly, it is essential to push for mandatory risk assessments and reporting protocols for high-risk routes, including those in the Red Sea.
5. This proactive approach ensures that logistics operations in geopolitical hotspots are well-prepared with necessary measures, promoting a secure and resilient global supply chain.

1. Encouraging Technology Adoption and Innovation:

1. The Budget should introduce strategic incentives aimed at encouraging logistics companies to adopt advanced technologies. These incentives may include tax benefits or financial support to incentivise the integration of cutting-edge technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and automation within logistics operations.
2. To propel India towards global logistics leadership, there should be a focused effort on developing a national platform for logistics innovation and knowledge sharing. This platform would serve as a hub for collaboration, facilitating the exchange of ideas and best practices among domestic and international stakeholders.

1. Prioritising Regulatory Harmonisation and Simplification:

1. Union Budget 2024-25 should prioritise regulatory harmonisation and simplification to achieve efficient and globally competitive logistics. This involves streamlining logistics regulations and aligning them with international standards to mitigate delays and reduce costs.
2. The Budget should advocate for the establishment of single-window clearance systems to ease cross-border trade and logistics operations. Additionally, measures should be proposed to enhance communication and coordination among diverse government agencies overseeing logistics regulation, fostering a more cohesive and responsive regulatory framework.
3. This strategic approach aims to enhance the ease of doing business and promote a seamless and agile logistics environment in line with international best practices, ultimately paving the way for a robust and competitive logistics sector in the years to come.

Logistics Sector Key Expectations from the Union Budget 2023

For the Union Budget 2023 announced by Finance Minister Nirmala Sitharaman, the logistics sector anticipated that it would prioritize the improvement of logistics infrastructure spanning highways, warehouses, and ports among others in addition to announcing incentives that will further promote business expansion.

The sector anticipated that the Budget would propose steps to strengthen the logistics and supply chain management infrastructure and provide additional cash to such efforts following the publication of the National Logistics Policy (NLP) the previous year. Additionally, it is demanded that attention be paid to air cargo, which will "enable seamless freight flow into and out of India."

On the Union Budget 2023 announcement day, the logistic sector was not disappointed. The logistics industry has applauded the government's proposal to increase the capital investment outlay by 33% to Rs.10 lakh crore in the Union Budget 2023–24, claiming that the emphasis on building infrastructure will strengthen India's position in the global supply chain.

Logistics Sector Key expectations from the Union Budget 2021

Finance Minister Nirmala Sitharaman during the Union Budget 2021 announced that the expenses related to infrastructure spending will be increased as there will be more importance levied on improved road and railways, new economic corridors, and push towards digitilisation. This move has definitely made a majority of logistic company become happy.

Some of the key takeaways from the Union Budget 2021 with regards to the Logistic Sectors are:

1. The national highways planned to be built in Tamil Nadu, Assam, Kerala, and West Bengal will get the final push and move towards completion. Road infrastructure will improve considerably according to logistic companies.
2. The budget also put an emphasis on pumping more money into commissioning of the eastern and western dedicated freight corridors (DFCs). The government has decided to allocate Rs.1,10,055 crore which will help in bringing down the logistic cost.
3. Digital technology will also get a push as Rs.1,500 crore scheme on digital payment was introduced which will ease the customer interface for various logistics companies in India.
4. A new scheme will be launched for flagging of merchant ships in India where Indian ship owners will be provided subsidy support. A total fund of Rs.1,624 crore has been allocated.
5. There will be more intent towards increasing the green energy and transcend towards zero-carbon environment.

Logistics Sector Key expectations from the Union Budget 2019

Finance Minister Nirmala Sitharaman, on 5 July 2019, presented her maiden Union Budget for the year 2019-20. She highlighted that the transport infrastructure in the country will improve with the help of government schemes such as Sagarmala, BharatMala, and UDAN. These schemes will also help in bridging the divide between rural and urban India.

Logistics Sector Key expectations from the Union Budget 2018

The central government recently created a separate division for the logistics sector under the Ministry of Commerce and Industry. And in November 2017, it was granted the infrastructure status. Hence, the logistics sector is expected to hold high relevance in the Union Budget 2018.

Huge infrastructure funding

The logistics division is expected to get access to infrastructure funding in the form of commercial borrowings, infrastructure policies, pension funds and long-term funding insurance companies. A few mega projects focused on logistics have already been announced by the government. The Sagar Mala Project and the Mumbai Trans Harbour Link Project require significant funds from the Union budget 2018.

Digitisation of processes

Experts from the industry are of the opinion that digitisation can further the logistics sector and introduce convenient methods to manage processes. Introduction of Electronic Logging Devices (ELDs) that record the movement of trucks would help automate the billing process and therefore automate the taxation process too.

Allocation of funds for logistics

Since the domestic consumption is on the rise, a larger inflow of funds from the Union Budget 2018 will benefit the logistics sector. This would also create opportunities for logistics startups.

Change in rules and taxes for the e-commerce industry

Lately, the limelight has been on the data penetration boom in the country. The e-commerce industry thus creates an opportunity for the logistics sector. Significant reforms with regard to the e-commerce industry in the Union Budget 2018 could boost the entire logistics sector.

The recent times have seen a rise in consumerism through the retail and e-commerce industry. This has made the logistics process pave way for value creation which will help further the economy. Increasing the transparency in the regulation of the logistics sector, pushing the digital drive for the logistics movement, focusing on the development of logistics hubs, and increasing the investment to eliminate the roadblocks of the logistics movement should be the aim of the Union Budget 2018.

Further, the logistics startups face major challenges in bagging government tenders since contenders are well-established and can bid for a low price. Hence, the upcoming budget should provide for a special window for such startups, which will help them play a significant role in mega government projects.