TN logistics policy unveiled with cost reduction & incentive proposals

TN logistics policy unveiled with cost reduction & incentive proposals

On Saturday (March 18), the Tamil Nadu government announced its Logistics Policy 2023, which aims to facilitate the development of a strong logistics infrastructure.

The targeted outcomes include a reduction in cost of logistics and leveraging private participation aided by initiatives like fiscal incentives for truck firms, container freight stations, warehouse operators, freight forwarders, start-ups and technology service providers among other related enterprises.

The government “intends to offer various fiscal incentives to market participants, operators and developers towards improvement in efficiency and visibility of trade and encourage business opportunities through private participation in the logistics sector,” the policy said.

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The vision of the policy, released by Chief Minister M K Stalin in the Secretariat, is to promote an integrated, reliable, cost-efficient and sustainable logistics system in Tamil Nadu for enhanced competitiveness and fast-tracked economic development.

The government of Tamil Nadu would, in coordination with the Ministry of Railways and through private participation, on pilot basis encourage commencement of container rail services and kisan rail services on strategic routes under market development approach.

Strategic coastal shipping routes would be assessed and identified to encourage and promote inter-modal transport that would result in cost effective services.

Coordination with relevant agencies to improve quality of air cargo related services, working with Central Bureau of Indirect Taxes and Customs and other authorities and operators to take steps for reducing dwell time at air cargo complexes and seaports.

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The government would extend the existing single window clearance setup under the aegis of Guidance Tamil Nadu and FaMe TN department to logistics activities for enhancement of ease of doing business.

Identification of skill gaps vis-a-vis logistics job roles and preparation of logistics sector skill plan is one of the initiatives to skill the workforce. Also providing medical and health insurance to heavy vehicle drivers registered in the State at a nominal price would be explored.

All such proposed initiatives form part of strategic interventions for cost-effective logistic services by supporting market development. Enabling integrated and robust logistics infrastructure development, promoting availability of cost-effective and high-quality services are among the strategic objectives.

Adopting new age technologies, enabling skill development, and building resilience and sustainability in logistics eco-system form part of key objectives.

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The outcomes targeted are reduction of cost of logistics for export-import as well as domestic freight, leveraging private participation for development of logistics infrastructure and formulating an effective coordination mechanism between State and Central agencies for facilitation and execution of initiatives in logistics sector.

Consistent high ranking of Tamil Nadu in the LEADS (Logistics Ease Across Different States) index of the Union government and enhanced economic growth and employment generation are among the other outcomes outlined in the policy.

The interventions to achieve the objectives include leveraging the GIS (Geographic Information System) layers of the State Master Plan being prepared under the PM Gati Shakti National Master Plan for enabling integrated planning and connectivity enhancement. Identifying and resolving existing connectivity bottlenecks and development of new infrastructure is another area of intervention.

Earmarking land parcels in upcoming industrial parks, clusters for the development of truck terminal/yard and for carrying out common logistics activities is cited as one among the proposed interventions. “Development of such facilities will preferably be undertaken through private participation. The government of Tamil Nadu will identify unutilised factory sheds within the existing industrial parks/estates/clusters in the State and make them available for logistics activities, wherever feasible.”

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The government would identify and earmark land parcels, minimum 50 acres, at strategic locations for development of Multimodal Logistics Parks, Logistics Park, Warehousing Clusters and Private Freight Terminal (PFT).

The fiscal incentives would be applicable for 5 years from the date of promulgation of the policy and further extension could be considered based on effectiveness and emerging requirements.

Proposed incentives include providing one-time reimbursement of 100 per cent of the patent registration fee in India to technology providers, start-ups and other business units developing technology enabled solutions for logistics efficiency improvement subject to a cap of Rs 25,000 per patent.

One-time reimbursement of 100 per cent of vehicle registration charges and road tax for 1 year for reefer trucks including retrofitting of capacity more than 15 MT by logistics trucking companies in Tamil Nadu. The fiscal incentive will be provided to registration of first 500 reefer trucks in the State during the policy period.

(With agency inputs)

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