Business Today

"GST will increase productivity and efficiency"

Raaja Kanwar, Vice Chairman & MD, Apollo International, tells Anilesh S. Mahajan that the logistics industry is poised for growth.
twitter-logo Anilesh S Mahajan   Delhi     Print Edition: April 23, 2017
Raaja Kanwar, Vice Chairman & MD, Apollo International (Photo: Vivan Mehra)

What changes will GST bring in to your sector?

The introduction of GST will incentivise the logistics sector in India. It is expected to act as the secondary factor that will build upon the primary foundation of a good infrastructure and faster adoption of technology in the sector. Implementation of GST would increase productivity and raise efficiency levels in the logistics sector and the economy as a whole. According to various industry estimates, freight times will come down by 30-40 per cent and logistics costs are expected to reduce by 20-30 per cent post GST. It will not only invite more investments and capital, but also ensure better implementation of investments and more access to better technologies.

How will the government's end-to-end delivery model, via a JV between Railways and DMIC, disrupt this space?

It will not disrupt the market. It is impossible for one company to cater to the entire logistics space, especially a market as big as ours. It is actually going to be helpful and will give a huge impetus to the sector, and help consolidate Apollo's logistics business.

The government plans to invest heavily in creating infrastructure. Will it make life any easier for logistics players?

The government announced huge investments in the infrastructure sector in the Budget which is in continuation with its increased focus on infrastructural development over the past few years. The total allocation for infrastructure stands at Rs 4,00,000 crore approximately, and the total capital outlay for the transport sector at an estimated Rs 2,50,000 crore. The Budget allocation for highways alone stands at Rs 64,000 crore in 2017/18. The increased investment in the infrastructure sector augurs well for the logistics players. Over the years, the industry lost out on a lot of business potential because of infrastructural deficiencies in our country. We are ready for this change as it will fasten the growth of the logistics industry in India.

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