Transport Corp of India MD calls for further infra push in next budget
NEW DELHI : As the country waits for the Union Budget for FY23 due to be presented to parliament on Tuesday February 1, Vineet Agarwal, Managing Director of Transport Corporation of India (TCI) Ltd, said the government should continue to focus on infrastructure development and increase infrastructure spending.
In an interview, Agarwal noted that the logistics sector is highly dependent on development on the infrastructure front, ranging from the increase in infrastructure spending and the reaction of new infrastructure, in turn has a direct impact or indirectly on the logistics sector.
He also hopes that more funds under the National Infrastructure Pipeline will be a major boost.
“The logistics sector is very heavily dependent on what happens with the infrastructure and what type of infrastructure is created and considered in the national infrastructure pipeline. If the infrastructure spending allocation continues and increases, it will directly and indirectly help the logistics sector,” he said.
Several industry experts and participants are hoping for an increase in government capital spending on infrastructure in a bid to spur growth as the economy is in recovery mode from FY21 lows. a third of Covid and the spread of the Omicron variant have heightened calls for public infrastructure spending.
He also reiterated the industry’s long-standing demand that gasoline and diesel be brought under the Goods and Services Tax (GST) and said that with high fuel prices, a credit of Input Tax (ITC) would be favorable to industries including logistics. sector.
TCI MD noted that more than 60% of freight moves by road and only 20% to 25% is carried by railways, and the latter is very low compared to the rest of the world and needs to change.
Furthermore, he noted that logistics costs need to be reduced and there is a need to move towards multimodal logistics to achieve this. He also said that there is a need to reduce loss and damage in the system, which basically leads to wastage.
He also highlighted the need to digitize India’s logistics network, which would reduce the speed of processes and also reduce costs. He noted that all these aspects were taken into consideration by the government when formulating the draft logistics policy.
“Hopefully we should see it adopted and implemented soon,” he said.
Talking about multimodal logistics parks, he noted that few such logistics parks have started to spring up in various parts of the country.
“These are very interesting and I think we will see and observe how they are or where what locations are and how they are developed for us to consider in the future, but at the moment we are not considering anything in terms of our own investment,” he said.
On TCI’s investment plans in the coming times, Agarwal said the company intends to purchase more ships and containers in the next fiscal year.
On Thursday, the logistics major reported a 143% rise in its consolidated net profit for the quarter ended December to ₹206 crore. In the corresponding period of FY21, it reported a net profit of ₹85 crore.
Regarding the strong performance in the October-December quarter, he said the business performed well even amid the pandemic, largely due to its diversified offerings ranging from freight transportation by road, rail and waterways to value-added services such as warehousing, cold chain services and freight forwarding.
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