Union Budget 2024-25: Setting the Future of the Warehousing and Logistics Sector
While the interim Union Budget for FY24-25 was announced in February, the Finance Minister presented the final version of the country's earnings and expenditures in July. Everyone from industry insiders to laymen had their eyes peeled on what the Union Budget had in store for their businesses and personal finances. In recent years, the warehousing, supply chain and logistics sector in India has flourished and established a strong foothold. With a significant boom in e-commerce post-pandemic and an uptick in entrepreneurial ventures, warehouse management systems and logistics play a key role in the nation's economy. As a result, the sector fell under the purview of the Union Budget FY24-25.
In this blog, we will dive into what the Union Budget had in store for the warehousing and logistics sector in India.
Allocations for the Warehousing and Logistics Sector
Infrastructure development has been a priority for the Government as per the Union Budget FY24-25. The warehouse space sector has been allocated ₹11.11 lakh crore to encourage state and private contributions towards economic growth. Additionally, ₹26,000 crore has been allocated to improve road connectivity. The allocation has made it clear that the Government plans to turn India into a Viksit Bharat by 2047.
However, the budget has been designed to balance economic growth and fiscal consolidation. The Government has also set a target of a fiscal deficit of 4.9% of the GDP for the year 2024-25. This target provides room for uncertainties like geopolitical conflicts and economic challenges. The realistic target and breathing room make the Indian market attractive to domestic and foreign investors and set the foundation for further economic expansion. The sector-based focus, such as the logistics warehouse sector, allows for greater preparedness to meet the economy's growth requirements and brings in stakeholders for efficient warehouse management.
Development of Logistic Parks
As part of the Union Budget FY24-25, the finance minister announced that the Government of India will undertake the development of 12 new industrial parks under the National Industrial Corridor Development programme. The plan is to construct these logistics parks with complete supply chain infrastructure, including 'plug-and-play' features, across 100 cities. For logistics companies, infrastructure is one of the nine sectors prioritised in this year's budget. As such, the National Industrial Corridor Development programme aligns with the Government's plans of creating 'smart cities' fitted with the latest technology. Previously constructed corridors like the Delhi-Mumbai Industrial Corridor (DMIC) and Western Dedicated Freight Corridor are integral to India's transportation infrastructure and warehouse management.
Focus on Make in India
One of the highlights of the Union Budget FY24-25 has been the manufacturing sector. The budget makes provisions to reduce the duty imposed on the sector to increase access to inputs, allowing it to integrate with the global supply chain. The Government's move to reduce customs duties is a decisive step towards boosting the competitiveness in the Indian manufacturing sector. An increased focus on skill development will only bolster the sector's capabilities for an efficient warehouse management system. The investment towards the manufacturing sector will have a profound effect on the economy, as well.
The theme of manufacturing in India is intertwined with other sectors like logistics and warehousing management. The investment and streamlining of the manufacturing sector will also benefit the logistics and warehousing sector. The logistics sector in India is known to generate significant employment. Since the budget also focuses on improving employment in the country, the integral logistics and warehousing management sector will also benefit from various incentive plans and programmes focusing on the same. As logistics parks outsourcing becomes a more viable option for business owners in India, the budget has enabled service providers to expand their clientele and offer innovative and economical solutions that cater to the end-to-end needs of the market.
At Lodha, we have always strived to stay ahead of the curve, and our industrial parks at Kurla and Palava are a testament to this fact. Expanding on our legacy of trust and excellence and anticipating our customers' needs ahead of time for world-class industrial parks in India, we have created Lodha Industrial and Logistics Park (LILP) in the heart of Mumbai and on the outskirts as top logistics parks in India.
Our strategic locations allow businesses to make the most of spacious warehousing facilities along with efficient in-city distribution. While the customisable and 'plug-and-play' units at LILP are available, we also allow businesses to lease spaces as per their business needs (built-to-suit solutions). Built to streamline operations, withstand load and fitted with safety measures, the warehousing facilities at LILP can help expand and scale your business. Being one of the best industrial parks in India, LILP ensures the best integrated logistics experiences and provides the best warehouses in Mumbai compared to warehouses in Navi Mumbai, industrial plots, industrial land for sale, warehouse in Bhiwandi, warehouse in Taloja, warehouse in Kurla, warehouse in Thane, warehouse in Palava and distribution centres in Mumbai.
With LILP, you can rest be assured of investing in a brighter future for your business venture.