Union Budget 2023-24 focused on the Amrit Kaal vision and was articulated on four key pillars. While Amrit Kaal was suggested in the previous years’ union budget, this year, the four pillars have been further evolved into seven. These have been named as Saptarishi and are on the key priority agenda of the Government.
These Saptarishi – or, the 7 primary priorities of the Union Budget 2023-24 – are broadly classified as follows:
- Inclusive development aims to promote fair growth and build a more inclusive society
- Reaching the last mile and creating policies and initiatives which benefit the neglected facets of society
- Investment in infrastructure to provide the citizens with better resources
- Unleashing the potential of the economy by implementing reforms in labour, land and education sectors
- Green growth will be encouraged to meet the long-term net-zero target set by the government
- Youth power will be harnessed by investing in education and skill development and creating job opportunities while encouraging entrepreneurship
- Financial sector will be strengthened by encouraging financial inclusion and expanding credit availability
The strategy outlined in the Union Budget is expected to offer a roadmap for logistics in India as well in the coming years.
Key Highlights of Budget 2023
In alignment with the Amrit Kaal vision for the next 25 years, here are the primary discussions from this year’s Budget announcement:
Investment of INR 75,000 crore for 100 critical transport infrastructure projects
100 critical transport infrastructure projects for last and first mile connectivity for ports, coal, steel, fertilizer and food grain sectors were identified and an investment of INR 75,000 crore was put aside for them.
Highest-ever capital outlay for Railways
The Budget allotted INR 2.40 lakh crore for Railways, proposing to manufacture 35 hydrogen fuel-based trains, 4,500 newly designed automobile carrier coaches with side entry, 5,000 LHB coaches and 58,000 wagons. This move will enhance the multimodal logistics ecosystem and help the sector become more streamlined.
Green growth showed prominence
With the PM’s net-zero pledge at COP26 acting as the catalyst, Union Budget 2023 heavily focused on green growth to meet this target. With focus on a myriad of green initiatives – green credits, green fuel, green energy and green farming to name a few – green mobility should help the logistics sector reduce the environmental impact. From a report by CEEW in 2022, India’s logistics is heavily reliant on trucks and decarbonisation of this sector will be challenging.
Higher Funds Need to be Allocated for Social Sector Spending
For the first time since 2009, the budget data has displayed social sector spending dipping below 20%, whilst capital investment has risen for three years in a row. Thus, the Government is looking to cut spending in less-priority areas to free up resources to invest in social sector spending.
Tax Relief for Middle-Class Taxpayers and Small Businesses
The Union Budget 2023 suggests raising the Section 87A tax credit from ₹5 lakhs to ₹7 lakhs under new tax regulations. As a consequence, a person from now on making up to ₹7 lakhs in taxable income will save close to ₹33,800 in taxes.
Similarly, this action plan stipulated the importance of a startup’s profits being free from income tax for three years. This is because especially in their early years, aspiring business owners struggle to assess the viability of their concepts.
Expansion of Pradhan Mantri Gram Sadak Yojana (PMGSY) For All-Weather Road
Highway maintenance across India will get approximately ₹2,600 crores, roughly 1% of the Ministry’s budget in 2023 – 2024. This effect is mainly a response to the Standing Committee on Transportation’s ‘2020 recommendation’. It stated that all state Governments should seek more funding for programmes promoting driver education and road safety.
Recognising the power of AI – Make AI Work for India
As AI gains greater prominence, the Budget makes provisions to establish a strong AI ecosystem and train skilled AI professionals. There are plans to set up three “Centres of Excellence for Artificial Intelligence” at top educational institutions and collaborate between educational institutions and leading industries to research and develop practical AI applications in agriculture, health, and sustainable cities.
“MSMEs are the backbone of the economy”
The Micro, Small and Medium Enterprises (MSMEs) sector was heavily hit by the COVID-19 pandemic, so the growth-boosting measures granted in this Budget were welcomed. Some measures such as the credit guarantee scheme, presumptive taxation allowance for micro enterprises and professionals and collateral-free loans will help empower and support the MSME sector.
Impact of the Union Budget 2023 on the Logistics Sector
The Union Budget 2023 is expected to have a direct impact on the logistics sector. Speaking of the multiple improvement measures, this budget has addressed tax reforms, infrastructure development, and other policy alterations.
Following the latest full-fledged budget revelation, the tax rates are hovering around 22%. This trend is expected to benefit the logistics sector by encouraging investors to fund more in growing companies like Porter to increase their efficiency.
As it happened, the logistics sector also praised the Ministry’s proposal to boost capital investment spending. In the Union Budget, the Central Government discussed its plans to increase capital investments by 33% to ₹10 lakh crores to facilitate infrastructure development that will improve India’s position in the global supply chain.
Taking the first steps into the Amrit Kaal
The Union Budget 2023 has generated avenues for increased funding towards infrastructure development, green development and other support to facilitate overall growth of the logistics sector. The increased focus on harnessing technology and digitalisation will prove to be beneficial across the board. With these measures initiated, India’s economy should see sustainable growth and continue the positive outlook as we march into the Amrit Kaal.
