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Since the beginning of 2021, business owners and industrial manufacturers were eagerly waiting for the Annual Union Budget because it would assist them climbing back to normalcy after seeing a decline in their financial growth in 2020. And thankfully, the Union Budget of 2021 as presented by our Finance Minister Nirmala Sitharaman gives us some new hopes. 

The overall theme of budget speech by the Finance Minister mainly focused on Fiscal Deficit, Disinvestment, Expenditure & Administrative Reforms. And as far as the logistics sector of India is concerned, the budget promises to improve Digitisation and Infrastructure Development

Nirmala Sitharaman affirmed that bringing the logistics costs down for the industries is at the core of their strategy to completely enable Make In India.


So with the focus on reviving the economy, she has increased the infrastructure spending significantly for new economic corridors, improved roads, railway infrastructures, and a significantly better push towards digitisation

As India rapidly transitions to a digital economy, Many logistics companies are pleased with the budget that was in line with their expectations. Let’s have a look in detail:

New Economic Corridors for Better Road Infrastructure- 

The Finance Minister has presented the outlay of  ₹1,18,101 lakh crore for the Ministry of Road Transport and Highways, of which ₹1,08,230 crore is for the capital (the highest ever).

Some of the flagship corridors would see considerable activity in 2021-22. More than 13,000 KM of roads for ₹3.3 Lakh Crore has already been awarded under the ₹5.35-lakh Crore Bharatmala Pariyojana, of which 3,800 KM have been constructed. 

To further augment the road infrastructure, 3,500 KM of national highway work in Tamil Nadu at an investment of ₹1.03 Lakh crore is being planned. This includes the construction of Madurai-Kollam Corridor, Chittoor-Thatchur Corridor, which will start next year. 

Scheme for Flagging of Merchant Ships

A new scheme to support more Indian flagships by providing subsidies to ship owners has also been announced. Over 5 years, the fund allocation provided will be ₹1624 Crore

The announcement for the massive investment of 2000 Crore on seven port projects under public-private partnership mode in FY 21-22. This will boost the logistic sector and enable overall economic growth. The foremost agenda under the budget is job creation. By 2024, the capacity of the yards will be doubled and that will eventually lead to the creation of more skilled and unskilled jobs.

Boost the Share of Public Transport For Economic Development- 

With road and rail connectivity being an indispensable factor of economic development of India, an allocation of ₹1,10,055 Crore for railways has been made.

 By June 2022, the eastern and western dedicated freight corridors will be commissioned. 

The government has prepared a National Rail Plan for India – 2030 and this will help in bringing down the logistics cost as well as ensure smooth connectivity between different points of the country and ensure easier & faster freight movement.

Digitisation, Key to Solving Pitfalls in the Logistics Sector- 

Having the potential to facilitate the creation of sustainable supply chain management, Digitalisation leads to an improvement in the functional parameters of freight operations.

The priority focus of the budget is to encourage the adoption of digital tools. The pandemic has created a slew of operational challenges for the $160 Billion Indian Logistics sector. 

The push towards digitisation makes it easier to do business in India. Enabling a one year tax holiday for start-ups and time-bound tax assessments to the Income Tax Administrative Tribunal play a key role in ensuring transparency and boosting taxpayer confidence. 

In particular ₹1,500 Crore-scheme on digital payment is introduced to focus on digital India, which will help smoothen the customer interface for logistics companies.

Talking about another pitfall of the logistics sector: consignors face this problem of daily haggling over phones to know the best price of their shipment. Fr8War  is a digital bidding platform for consignors that creates a digital connection between consignors and carriers.

Consignors need to freight details along with the ceiling price, and various transporters will bid for it from the other end. Consignors get the best price for their shipment and transporters easily get new freight contracts. A win-win scenario for both the parties.

Download Fr8War App now.