Ahead of the formulation of a policy to promote logistics infrastructure, the industry sector has urged the state government to allot land, provide investment allowances and industrial subsidy to those who want to set up logistics parks to help a product reach consumers faster from its place of manufacture.
In a significant push to industries’ long-standing demand for last-mile connectivity for effective movement of goods, the GST regime is blurring state boundaries, allowing warehouses to be set up anywhere, not necessary in the state where the product is supposed to be sold. In this scenario, logistics facilities will play a key role and bring down the cost of production.
“In India, 15 per cent of the cost of production of a product goes towards expenses incurred on transportation while the world average is only about seven to eight per cent. If we have enough logistics facilities to move a product to its destination faster, the price of the product will come down significantly,” AP Chamber of Commerce and Industry Federation (APCIF) general secretary Potluri Bhsakara Rao said on Saturday.
Speaking to mediapersons after the APCCIF submitted the suggestions from the industry sector on improving logistics infrastructure in the state, Rao said another important area that the government should look into was removal of toll plazas in the country, which not only delays the movement of trucks, but also leads to wastage of fuel worth Rs. 20,000 crore to Rs.25,000 crore per annum.
“The government could impose additional tax on the vehicle owners to raise the money equivalent to what the toll plaza contractors collect and pay them directly,” Rao said and pointed out that if this is not possible, another suggestion was to use technology so that as a vehicle approaches a toll plaza, the electronic gadgets at plaza would read the card that the driver would flash through windscreen which reads it and then debits his account the amount which he has to pay as toll fee, he said. The industry body wanted the government to set up an apex body which will coordinate with the Centre.