Post-Budget 2024: Industry Leaders React to Pivotal Economic Policies

Following Finance Minister Nirmala Sitharaman's announcement of the Union Budget, which prioritizes employment, skilling, MSMEs, and infrastructure, industry leaders are analyzing its impact on various sectors.

While little was said explicitly regarding the logistics industry, the aggregate measures taken across segments are likely to provide the necessary fuel for logistics and supply chain expansion in the coming years.

The central government has committed to developing infrastructure and has set aside INR 11.11 lakh crore for capital expenditure, highlighting the potential economic benefits. Twelve new industrial parks with complete infrastructure and "plug and play" amenities will be developed as part of the National Industrial Corridor Development Programme and will be positioned in or close to 100 cities.

Referring to the budget as a growth strategy for India's economy, "prioritizing national infrastructure development with a significant allocation of 3.4% of GDP towards capital expenditure and regional equity with 'Purvodaya' aligns seamlessly with our mission to create a nationwide logistics network," said Mahindra Logistics Ltd.'s managing director and CEO, Rampraveen Swaminathan. Road connectivity projects, industrial parks suitable for investment, and energy transition projects will receive more attention, which will improve logistics efficiency, lower transportation costs, and encourage sustainable practices."

Sandeep Chadha, Founder & CEO of Warehouster, highlighted how the decision to build industrial parks benefits the country's warehousing industry, saying, "This expansion caters to the booming e-commerce market and the growing need for efficient storage." Smart placements will improve delivery times and save transportation costs while boosting connection."

It is anticipated that the emphasis on infrastructure will encourage the growth of new economic activity, enhance accessibility to transportation, and reduce transportation costs.

The growth of the Industrial Corridor, especially the Amritsar-Kolkata route, along with the ongoing emphasis on road connections, according to Vivek Juneja, Founder and Managing Director of Varuna Group, "signals a robust future for the logistics sector. " In order to ensure sustainable growth, minimize inefficiencies, and strengthen the logistical framework, these infrastructure improvements are essential."

In addition, the FM promised that significant infrastructure projects in Andhra Pradesh and Bihar would soon be underway.

Important road connectivity initiatives like the industrial node at Gaya and the Patna-Purnea & Buxar-Bhagalpur Expressways are especially notable. These programs will boost economic activity in the eastern region and encourage regional connections." KK Agarwal, CMD, CJ Darcl Logistics Ltd., said.

Eugene Panfilov, Managing Director, Borzo India, had a similar viewpoint and expressed interest in the Andhra Pradesh market. He stated, "Intra-city logistics will be improved by the upgraded road infrastructure within key cities such as Vijayawada, Kurnool, Amaravati, Visakhapatnam, and Guntur." Furthermore, the creation of the Visakhapatnam-Chennai Industrial Corridor and enhanced road access to important commercial centers will facilitate the transportation of commodities and provide new market opportunities."

The Union budget 2024–25 emphasized the government's assistance for the country's MSMEs in addition to infrastructure. Through the provision of term loans without collateral or third-party guarantees, a new credit guarantee plan will assist MSMEs. Each applicant will have access to a self-financing guarantee fund that offers coverage up to INR 100 crore.

In addition, 24 new SIDBI branches will be opened, the turnover criterion for TReDS platform onboarding will be lowered, and the Mudra loan cap will be raised to INR 20 lakh.

"The budget's initiatives to reduce stamp duty will lower costs for warehouses and other facilities, boosting infrastructure development," stated Mahesh Fogla, Executive Director of Patel Integrated Logistics Limited. Mudra's loan limits will be raised from INR 10 lakhs to INR 20 lakhs, which will improve MSMEs' support and promote sustainable growth. Establishing an Integrated Technology Platform to enhance the results under the Bankruptcy and Insolvency Code (IBC) will additionally expedite the retrieval of unpaid debts for creditors engaged in operations."

The establishment of e-commerce export centers across the nation under a smooth regulatory and logistical framework was also mentioned during the budget speech. According to Sitharaman, the export centers will expedite export clearances while also providing warehousing, customs clearing, processing returns, labeling, testing, and repackaging services.

Senior Vice President and Managing Director of DHL Express India, R.S. Subramanian, expressed satisfaction with the government's efforts to promote MSMEs and the manufacturing sector, saying, "We are pleased with the Government's initiatives in support of MSMEs, manufacturing, and infrastructure." The idea to set up E-commerce Export Hubs for traditional craftsmen and MSMEs will help them expand internationally."

In addition, the government unveiled a bold plan to create 4.1 crore jobs over the course of the next five years, with funding of INR 2 lakh crore. A specific INR 1.48 crore fund with the goal of skilling 20 lakh youth is at the centre of this endeavour. This is yet another positive step for the country's commerce, innovation, and progress.

FedEx MEISA President Kami Viswanathan said, "We applaud the lowering of corporate tax rates for overseas businesses. Transformative growth will be fueled by the Union Budget 2024's forward-thinking measures to balance infrastructure expansion, cultivate a skilled workforce, encourage environmental stewardship, and advance digitization. Smooth trade lanes can be established by allocating 3.4% of GDP to infrastructure, bolstering the Jan Vishwas Bill 2.0, and providing incentives to governments to carry out Business Reform Action Plans. Furthermore, the startup environment will benefit from the elimination of the angel tax, which will promote innovation and expansion. India's standing in the international trade environment would be further enhanced by a strong emphasis on assisting MSMEs and manufacturing."

The center intends to upgrade 1,000 industrial training institutions to match courses with industry needs as part of the government's Employment and Skilling initiative. It also plans to provide a one-time wage subsidy for first-time employees via Direct Benefit Transfer (DBT) and connect one crore youth with internships in 500 companies. The budget also allots more than INR 3 lakh crore for women and girls, promoting economic inclusiveness by establishing working women's hostels and creches.

The FM also raised awareness of startups, the sector of the economy that is expanding the quickest in the country.

Rahul Garg, CEO and Founder of Mogilx, commented on the subject, saying, "The elimination of the angel tax is a welcome move for India's startup ecosystem." This would encourage innovation, as would the creation of a 1,000 crore rupee venture capital fund for the space industry." He also praised the government's manufacturing initiatives, such as the creation of MSMEs and plug-and-play industrial parks, which he says are essential to establishing a Viksit Bharat.

In general, the industry has reacted favorably to the Union budget 2024–25 and anticipates beneficial economic effects.

Chief boom Officer of Allcargo Group Ketan Kulkarni: "India's current growth ride is sufficiently fueled by Finance Minister Nirmala Sitharaman." The budget's emphasis on infrastructure, technology, and job growth ought to pick up steam. Spending will increase due to increased investments in industry and infrastructure, but it is admirable that the government is determined to control the fiscal imbalance. The budget is constructive and significant because of its forward-thinking and balanced approach."

This Union Budget 2024–25 lays the groundwork for a historic year by implementing a comprehensive plan to boost economic growth, increase workforce engagement, and support vital industries.