MUMBAI : The Union Budget 2022-23 comes at a very relevant time, as the nation needs the right set of incentives and support measures to accelerate its recovery. In order to make India a $5 trillion economy in line with the Governments vision, it is necessary to introduce various policy initiatives to accelerate the development of an integrated logistics ecosystem.
In order to achieve this, we expect the budget to extend the Corporate Tax Benefits for Infrastructure companies and reduce the GST from 18% to 12% for the Ports & Logistics sector in order to boost infrastructure growth, EXIM competitiveness and make our country self-reliant. Leveraging enhanced utilization of existing Ports & Terminals by enabling policy framework also needs to be looked at.
The government should look at deregulating the tariff for existing PPP projects which will in turn will provide welcome relief for stressed/underperforming projects in major ports. This will also enable a level playing field for PPP players operating under different tariff regimes. There is a need to treat PPP Projects as quasi Government Projects and provide all necessary support for speedy dispute resolution, review framework to adapt to market conditions and support of low cost financing as govt. projects enjoy. There is need to have Development Finance Institutions and Infrastructure debt funds, which could provide low cost long duration funding for infrastructure Projects in the country.
With the growing importance towards maintaining ESG standards, it is also important to incentivize mechanization & upgradation of ports with latest technologies for environment friendly means of cargo handling i.e. a push for Green and Smart Ports.
Development of Sovereign Wealth Fund with a global footprint can play pivotal role for a nation. The Fund can be started by transferring of high performing assets as initial equity coupled with professional management. Simultaneously, undertaking a structured monetization/divestment programme to unlock the value of existing assets of Government can be expedited through holding company structure. Overall India is well positioned to play an active and major role in global economy.
Source : Rajiv Agarwal,
Operating Partner (Infrastructure) – Essar and Managing Director – Essar Ports