The transportation sector plays a vital role in economic progress, particularly in a vast developing nation like ours. India has to spend 13-14% of GDP on supply chain and logistics compared to 6-7% of GDP spent by countries like the USA and China.

The 160-billion-dollar transport sector and the 150-million-dollar logistics sector have received a much-needed upliftment through various allocations in Budget 2022. By utilising the seven ways, i.e. roads, railways, waterways, airports, ports, mass transport and building a robust logistics infrastructure, India is on the path to increased productivity and sustainable growth. Through the development of infrastructure, multimodal connectivity will help connect the nation as the transport of people, goods, and services can be completed at reduced time and cost.

Budget 2022 provides for various progressive and ecologically sound projects slated to be implemented while maintaining the balance between expenditure and fiscal deficit. Streamlining a multimodal logistics system through Budget reforms and increased allocation will improve India’s standing within global supply chain networks. 

Here are the salient initiatives benefitting the transportation sector in Budget 2022:

PM Gati Shakti 

The PM Gati Shakti National Masterplan is an ambitious pillar of India’s economic development. It received its first outlay of Rs 20,000 crore in Budget 2022. It is a holistic and inclusive plan designed to propel India’s progress to a $5-trillion economy through better infrastructure, higher productivity, sustainable energy, climate action and seamless connectivity.

Within this integrated scheme, 16 different ministries will function under a common digital platform for ease of coordination and planning of infrastructure projects. PM Gati Shakti will also coordinate with the various state governments and improve the network between different economic zones spread across India.

Additional Read: Will Union Budget 2022 Provide a Booster Shot to Automobile Industry? 

Longer roads for broader reach

The national highways will be extended by 25000 kilometres in this fiscal year. The budget devotes a considerable amount to Rs 81,006 crore to the same. India will also be connected by expressways in line with the much-awaited PM Gati Shakti project. 

This move will significantly benefit the logistics and transportation sector to provide better and faster services to end-users. It also opens up opportunities to several ancillary industries, logistics aggregators, and infrastructure developers. At Tata Capital, you can now get easy and custom financing solutions to tap into new business opportunities opening up through such Government-backed initiatives. 

Logistics and management improvements

The Unified Logistics Interface Platform (ULIP) is another budget highlight. This initiative ensures that all mode operators are brought under an integrated, digitised platform. ULIP will save logistics costs time and help maintain just-in-time inventory management without complicated documentation.

Warehousing and logistics facilities will get revamped through new logistics hubs in Tier-II and Tier-III cities. Thirty-five new multimodal logistics parks are slated to come up across India in the coming years.

If you are in the logistics industry and want to expand your fleet of vehicles, this is the right time as 2.9% of GDP is devoted to the transport and logistics sector. Tata Capital offers commercial vehicle finance and solution to other vehicle finance, including Light, Medium, Heavy Commercial cars and buses. We also provide loan schemes for upgrading or replacing vehicles.

transportation sector

Harnessing waterways for transportation

India aims to utilise the inland waterways for quicker and more efficient means of transport. Budget 2022 has allocated funds to effectively implement the new Inland Vessels Act 2021, ensuring cost-effective and speedy cargo movement via our waterways. Following the PM Gati Shakti project, 100 new cargo terminals are also in the pipeline.

Under the aegis of the Sagarmala programme initiated in 2015, technological innovations mandated by global maritime organisations will be implemented in India.

The government is set to provide subsidies to Indian shipping companies bidding for global tenders to boost the shipping industry. Ship acquisitions have also been made easier as royalties and interest earned by non-residents from ship leases are exempt from taxation.

If you seek to pursue a business opportunity in the water transport sector, now is the right time. With Tata Capital, you can get access to up to Rs. 2 crores in the form of term loans to invest in the growth of your dream business. 

Additional Read – Pre-budget expectations for the retail consumer

Railways and ropeways

Along with bullet trains, 400 new generation Vande Bharat trains are set to modernise Indian railways within the railway sector. The improved rail network will bridge the rural-urban divide.

There is a plan to introduce new routes and services for the ease of farmers and MSMEs. The integrated postal and railways network will also help small traders from rural villages supply their products to all corners of the country.

The budget also allocates funds towards improving connectivity through ropeways in a bid towards an ecologically sustainable mode of transportation. In hilly and congested urban areas, ropeways can connect people without burdening the environment or the mass transit system.

Atmanirbhar Bharat

With a focus on expanding infrastructure, Budget 2022 aspires to build an Atmanirbhar Bharat through better connectivity, an efficient transport system and most importantly, opportunities for starting or expanding indigenous enterprises. 

Take advantage of the improving transportation sector and seize the opportunity to be part of Atmanirbhar Bharat with Tata Capital as your financing partner. Check out the various loan schemes and structured products offered by Tata Capital today to find what suits you and your business best. 

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