Allcargo Logistics’ CMD Recommends Abolition Of TAMP In Union Budget 2013

Shashi Kiran Shetty
Chairman and Managing Director
Allcargo Logistics

With the government’s decisiveness to roll out the much-awaited Goods and Service Tax (GST), we hope that the implementation will eradicate the hurdles by simplifying the tax structure. This move will open ‘India’ as one single market and bring down state level barriers. In the long term, GST will stimulate the emergence of a true “hub-and-spoke” system, with companies setting large hubs in key strategic gateway locations coupled with smaller spoke warehouses nearer to metro/ urban consumption centres.

In India, companies still utilise road transportation for majority of the goods movement. The government must accelerate the constructing and upgrading of freight corridors and highways that will result in faster transportation, lower fuel consumption and wastage. We also hope that the government recognises the importance of logistics as the backbone of our economy and sets up a regulatory/governing body for the same.

We wish that over a period of time, the shipping ministry will promote coastal shipping in India by doing away with the customs duty for ships which are built and operated in a foreign country, under the Indian Flag. The government of India needs to accept the long pending demand of the industry to abolish the customs duty on coastal ships, thereby making it economical for the ships to operate in the Indian coast. As per several representations made, coastal shipping is the most efficient way to transport goods. It not only helps to decongest the Indian roads and burn less fuel, it also is cost effective thus helping Indian manufactures become more competitive in their products, helping the consumers and managing inflation.

All the infra projects need to have the environmental clearance before sending it for bidding, so that there is complete transparency and visibility for the participating company.

Last but not the least, we recommend the abolition of TAMP at the earliest. The JNPT terminal, which is the most important port handling well over 60% of the country’s container trade, has become extremely congested. It is showing India in poor light due to the frequent break-down in port operations due to many reasons, a primary one being the TAMP regime. This has de-motivated the private terminals with respect to performing to their capacity thus causing tremendous strain on the efficiency of the port and making the Indian exports far more expensive and delayed. Several orders are thus cancelled in such situations.

There are plenty of suggestions that have been made in the past to initiate the transaction cost without the authorities intervening in the day-to-day transactions of the Logistics companies. We definitely wish that the government pays attention to all these suggestions made to bring about the reforms.