Transportation and Logistics
Budget 2021 brings a renewed focus on urban transportation and logistics sectors
02 Feb 2021

The pandemic has created unprecedented disarray in the transport and logistics sector, the world over. Though remained resilient to the adversities to a certain extent, these sectors in India also suffered many operational challenges. Labor shortage, cash-flow issues, operational issues at the warehouses because of the harsh curfews are some of the difficulties faced by the logistics sector in India.

 Transport & Logistics:  Focus on development of the sector

  • Urban Transportation
The budget FY 2021-22 has provided a considerable thrust on urban transportation, which has been one of the worst-hit sectors on account of the pandemic. Concerted efforts are planned to raise the share of public transport in urban areas through the expansion of the metro rail network and augmentation of city bus service.

a. Public Transport Buses
A new scheme is to be launched to support the augmentation of public bus transport services. It will facilitate the deployment of innovative PPP models to enable private sector players to finance, acquire, operate, and maintain over 20,000 buses with an outlay of INR 18,000 Cr. The scheme will boost the automobile sector, provide a fillip to economic growth, create employment opportunities for our youth, and enhance ease of mobility for urban residents.
"We will work towards raising the share of public transport in urban areas through expansion of metro rail network and augmentation of city bus service,” said the FM during her budget speech.
b. Urban Metro Rail
Two new technologies i.e., ‘MetroLite’ and ‘MetroNeo’ to be deployed to provide metro rail systems at a much lesser cost with the same experience, convenience, and safety in Tier-2 cities and peripheral areas of Tier-1 cities. This would help the returns expectations from the metro to improve and may attract private funding in metros.
Metros in cities such as Kochi, Chennai, Bengaluru, Nagpur, and Nashik will also receive central funding of about INR 88,059 Cr. This is expected to significantly increase connectivity and hassle-free public transport across these cities.
  • Logistics - Warehousing
Monetization of warehousing assets of CPSEs such as Central Warehousing Corporation would be on the anvil in FY2021-22. Privatization of these central warehouses would improve these warehouses as well as provide better infra and services to clients, along with raising capital for the government to focus on logistics sector improvement.  However, this year’s budget did not mention the future of the ongoing National Logistics Policy that was announced in the 2020 budget.
Authored by:
Savio Monteiro, Sr. Vice President, Transportation and Logistics, Praxis Global Alliance  

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