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JULY <strong>2016</strong><br />
SECTOR OUTLOOK<br />
Japan and the Ministry of Commerce and Industry (MoCI)<br />
of India. It is expected that the project would envisage an<br />
employment growth potential of CAGR 14.87% over five<br />
years, industrial output growth of CAGR 24.57% and<br />
exports growth of CAGR 31.95% during the same period.<br />
T h e r o l l o u t o f D F C w o u l d d r i v e h i g h e r<br />
efficiency/productivity gains for container terminal<br />
operations as it will allow higher double-stacking, lesser<br />
investment in wagons and faster turnaround. The<br />
commercialization of DFC will augment the capacity by<br />
allowing a movement of 360 containers per train in<br />
around 24 hours from JNPT to NCR compared to 90<br />
containers in around 40-50 hours, at present. Hence, the<br />
rollout of DFC is one of the major catalysts for logistic<br />
sector to grow in future.<br />
India's overall logsitics performance index<br />
54<br />
47 46<br />
39<br />
2007 2010 2012 2014<br />
Source: World Bank<br />
New Proposed Corridors<br />
New Corridors End stations Distance covered (Km)<br />
East-West Corridor Kolkata-Mumbai 2,330<br />
North-South Corridor Delhi-Chennai 2,343<br />
East Coast Corridor Kharagpur-Vijaywada 1,100<br />
Southern Corridor Chennai-Goa 899<br />
Source: Indian Railways<br />
States influence by DMIC Project<br />
DMIC<br />
State<br />
Source: DMIC<br />
Area Under<br />
project<br />
influence<br />
Area<br />
(sq. km)<br />
Total area<br />
of<br />
impacted<br />
State<br />
(Sq. km.)<br />
Percent Total<br />
Area of<br />
Respective<br />
State<br />
under PIA<br />
(project<br />
influence<br />
area)<br />
Delhi 1,483 1483 100%<br />
Haryana 26,410 44,212 60%<br />
Rajasthan 198,849 342,236 58%<br />
Gujarat 120,706 196,024 62%<br />
Maharashtra 56,760 307,713 18%<br />
UT of Dadra &<br />
Nagar Haveli 491 491 100%<br />
UT of Diu & Daman 122 122 100%<br />
Uttar Pradesh 28,265 238,566 12%<br />
Madhya Pradesh 2,866 308,144 1%<br />
Uttaranchal 533 53,566 1%<br />
Total of All States<br />
under influence 436,486 1,492,557 29.20%<br />
54<br />
39<br />
Overall rank<br />
Deterioration across all parameters<br />
65<br />
Customs<br />
2007 2014<br />
47<br />
Source: World Bank<br />
58<br />
42 40 44<br />
Infrastructure<br />
International<br />
shipments<br />
31<br />
52<br />
Logistics<br />
quality/competence<br />
57<br />
42<br />
Tracking and tracing<br />
47 51<br />
Timeliness<br />
Implementation of GST would ensure better cost<br />
effectiveness and improve efficiency<br />
The entire country is pining hopes on passing the GST in<br />
parliament which aims to simplify the current indirect tax<br />
regime by bringing all central and state levies under one<br />
single head having uniform tax rate. Rollout of GST would<br />
benefit the logistic sector as it would reduce the tax<br />
complexity, bring efficiency in cross-state transportation,<br />
streamlining paperwork for road logistics operators and<br />
would bring down the transit time and logistics costs.<br />
Further, GST will permit rationalization of warehousing<br />
space, as currently corporate generally operate state-level<br />
warehouses, inventory and distribution centers to avoid<br />
Central Sales Tax (CST), rather than maximizing on<br />
operational efficiency. GST will allow companies to move<br />
30
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