core sector communique

Recommendations for the Union Budget 2010-11 from Mr.  D P Agarwal, VCMD -TCI, India’s leading integrated supply chain and logistics solutions provider:

 

1)    Issue: Industry status and an Integrated Policy for the logistics sector

The logistics sector has developed into a major service sector as all major businesses, including the automobile, FMCG, pharmaceutical sectors increasingly become dependent upon it. This helps companies concentrate on their core activities as their logistics requirements are taken care of by third party logistics companies like TCI.

 

TCI suggests setting up a separate regulatory authority for the logistics sector on the lines of the Insurance Regulatory & Development Authority or Telecom Regulatory Authority of India as it would help to coordinate between the various ministries for an integrated policy

 

 

2)    Issue: Toll Policy

Multiple toll points on highways reduce efficiency and adversely affect the turnaround time of trucks. Moreover, the lack of uniformity in toll charges owing to different stretches on BOT basis creates irregularities in the cost structure.

 

A centralized toll mechanism is needed to ensure uniformity in the toll charges paid by trucker drivers at various check points. This would lead to reduction in stoppage time and create greater efficiency.

 

3)    Issue: Cold Chain Service

There is a need to bring in uniformity in the sales tax structure on processed foods. There is also the need to bring down the high import duty on cold chain equipments.

·         The government, should reduce sales tax and excise on processed value-added foods, remove Octroi, entry tax etc.

·         Industry should be given exemption/subsidies to encourage investment in cold chain infrastructure

·         Since time-definite delivery is critical, inter-state check-posts should have a clearance passage for refrigerated transportation

·         In order to boost export business by road to countries like Bangladesh, Nepal, Bhutan, Pakistan and Afghanistan we need to ensure modern warehousing, cold storage and efficient equipment handling facilities at borders with all the securities system should be set up.

 

4)    Issue: Modernization of Rail freight sector

Railways have become an important mode of transportation.

The Government must expedite the development of the rail-freight corridor to give a much-needed fillip to the rail freight sector. Modernization of rail terminals and handling facilities should be commissioned for a quicker turn-around of the non-container rakes. There must be time-scheduled freight trains on all major routes.

 

5)    Issue: warehousing operations

Warehousing should be treated at par with infrastructure projects and should enjoy similar benefits. There is need for long-term investment commitments from public and private players alike for developing warehousing facilities. It would also involve land reforms which will help in setting apart lands for logistics facilities.

 

There is a requirement of specific development control rules (DCRs) for warehousing which are very unique structures built for specific purposes.

 

6)    Issue: Reduce documentation

Documentation has to be computerized and minimized so that less number of forms are needed to be filled at checkposts/ offices. It will also do away with agents and unauthorized payments being made to them.