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Union Budget 2022 – India Boosting Nation’s Logistics Sector
Presented by Finance Minister Nirmala Sitaram, Union Budget for FY 2022-2023 has been structured to have a transformative approach to the nation's economic growth and sustainable development with a focus on Green Logistics. In her budget speech, she pointed out that the driving engines for this transformation would be roadways, railways, seaports, airports, mass transportation, waterways, and logistics infrastructure. Looking from a logistician's point of view, FY 2022-2023 could be crucial for the nation as we would witness significant changes in its logistical infrastructure and policies.
Currently, India incurs a whopping 14% of its GDP as logistics cost, which is among the highest in the world. To tackle the current situation, a Unified Logistics Interface Platform would be introduced, which will facilitate the efficient transfer of data that can help in increasing the effectiveness of the Indian multi-modal transport system. Better transparency and less paperwork would also help increase the effectiveness of this platform. In the past years, less attention was given to India's increasing scope of the multi-modal transport system. In addition to a unified platform, the government is also planning to set up multi-modal logistics parks and initiatives to link the same with the well-established Indian Railway network. Around 35 multi-modal logistics parks would be built under various development projects
This year's budget was also more inclined to increase logistics connectivity to and within Tier II & Tier III cities. Rather than focusing on already established logistics hubs based in Tier I cites, expanding the nation's logistics capabilities to semi-urban and rural regions can help in reducing the lead times of overall logistics activities. This project can help create more jobs in semi-urban and rural areas of the nation by facilitating digital education for its youth as such jobs require new-age technology-ready candidates familiar with concepts like blockchain.
After the announcement of the FY2022-2023 budget, stock prices of logistics firms have increased. From an investor's point of view, Union Budget 2022-2023 will attract many investments towards the nation's logistics sector from domestic and foreign players. After all, the much-anticipated budget promises many game-changing initiatives to increase India's logistics infrastructure, capability, and capacity, but only if the government walks the talk.
Contributor: Ajith Yogisha
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