Union Budget, 2022: Lookout For Logistics Sector And Supply Chain Ecosystem

In the Union Budget 2022-2023, FM Nirmala Sitharaman announces multi-layered aid for the logistics sector and the supply chain ecosystem. The budget denotes that the scope of PM GatiShakti National Master Plan will encompass the 7 engines for economic transformation, seamless multimodal connectivity, and logistics efficiency. It will also include the infrastructure developed by the state governments as per the GatiShakti Master Plan. The focus will be on planning, financing including through innovative ways, use of technology, and speedier implementation. During a time when inflation is rising in the country and supply chain disruption is not a new challenge, these projects will help the logistics system in the country.

FM Sitharaman announces Seamless Multimodal Movement of Goods and People. The budget mentions that the data exchange among all mode operators will be brought on Unified Logistics Interface Platform (ULIP), designed for Application Programming Interface (API). This is expected to provide for efficient movement of goods through different modes, reducing logistics cost and time, assisting just-in-time inventory management, and eliminating tedious documentation. Most importantly, this will provide real-time information to all stakeholders, and improve international competitiveness. An open-source mobility stack, for organizing seamless travel of passengers will also be facilitated. This move will directly impact the logistics sector positively. Additionally, FM announces that the contracts for the implementation of Multimodal Logistics Parks at four locations through PPP mode will be awarded in 2022-23.

Industry opinion:

Bhavik Chinai, Group CEO, BVC Logistics commented to the media, "The government's deep focus on tech-driven change is admirable. Gati Shakti network impetus with about 100 cargo terminals & 4 new National Logistics Parks will help boost Industrial growth and Atmanirbhar Bharat. The battery-swapping policy with interoperability is a welcome introduction toward sustainability."

Chinai added, "Expansion of SEZ's advantages to existing infra through new legislation is promising for the G&J sector. Alongside, the Customs National Portal with a promise to facilitate customs clearance digitally will reduce the transaction costs in jewellery exports by over 20%. The reduction in polished diamond import duty is deeply appreciated. Overall, the budget 2022 is very positive and we look forward to quick execution of the digital initiatives."