Transport Corp of India MD calls for further infra push in upcoming budget
2 min read . Updated: 28 Jan 2022, 09:51 PM IST
PremiumAgarwal noted the logistics sector is highly dependent on the development on the infrastructure front ranging from increase in infra expenditure and reaction of new infrastructure, in turn impacts the logistics sector directly or indirectly
NEW DELHI : As the country awaits the Union Budget for FY23 set to be presented in the parliament on Tuesday, February 1, Vineet Agarwal, the Managing Director for Transport Corporation of India (TCI) Ltd has said that the government should continue with its focus on infrastructure development and also increase the expenditure on infrastructure.
In an interview, Agarwal noted the logistics sector is highly dependent on the development on the infrastructure front ranging from increase in infra expenditure and reaction of new infrastructure, in turn impacts the logistics sector directly or indirectly.
He also hoped that more funds under the National Infrastructure Pipeline will be a major boost.
"The logistics sector is very highly dependent on what happens with the infrastructure and the kind of infrastructure that's created and that is being envisioned in the National Infrastructure Pipeline. If the allocation towards the expenditure on infrastructure continues and increases that will directly and indirectly, help the logistics sector," he said.
Several experts and industry participants are hoping for an increase in capital expenditure by the government in infrastructure in a bid to push growth as the economy is on a recovery mode post the lows of FY21. The concerns of a third of Covid and spread of the Omicron variant have accentuated calls for public expenditure on infrastructure.
He also reiterated the long-standing demand of the industry to bring petrol and diesel under the ambit of the Goods and Services Tax (GST) and said that with high fuel prices, an input tax credit (ITC) would be supportive for industries including logistics sector.
The TCI MD noted that more than 60% of the cargo moves through roads and only 20%-25% is transported through railways, and the latter is very low compared to rest of the world and needs to change.
Further, he noted logistics costs need to be lowered and there is a need to move towards multimodal logistics in order to achieve that. He also said that there is a need to reduce losses and damages in the system, which essentially leads to wastage.
He also emphasised on the need for the digitisation of India's logistics network which would lower the speed of processes and also reduce cost. He noted that all these aspects have been taken into consideration by the government while formulating the draft logistics policy.
"Hopefully, we should see it adopted and implemented soon," he said.
Speaking of the multimodal logistics parks, he noted that few such logistics parks have started coming up in various parts of the country.
"Those are very interesting and I think we will see and observe how they are or where what locations come up and how they are being developed for us to consider in the future, but at right now we are not considering anything in terms of our own investment," he said.
On TCIs investment plans in times ahead, Agarwal said that the company intends to buy more ships and containers in the next financial year.
On Thursday, the logistics major reported a 143% rise in its consolidated net profit for the quarter ended December at ₹206 crore. During the corresponding period of FY21, it had reported a net profit of ₹85 crore.
On the robust performance in the October-December quarter, he said that the company has performed well even amid the pandemic largely because of its diversified offerings ranging from cargo transport through road, rail and waterways to value added services like warehousing, cold chain services and freight forwarding.
