Logistics sector to lose Rs 50,000 crore due to lockdown; relief package needed: Industry body ICC
“With the lockdown extended to May 3, the cumulative loss estimate is as high as Rs 50,000 crores with the highest loss coming from the Aviation Sector, followed by the Roadways, in terms of lost Toll Taxes and Goods wasted on the road due to a sudden lockdown, grinding to a halt fully loaded trucks,” ICC said.
New Delhi: Estimating losses to the logistics sector at about Rs 50,000 crore due to the coronavirus lockdown, industry body ICC on Thursday demanded a relief package for the industry, including priority lending and lower taxes. The growing logistics sector in India is looking at mounting losses, with the aviation sector taking the biggest hit, the Indian Chamber of Commerce (ICC) said in a statement.
“With the lockdown extended to May 3, the cumulative loss estimate is as high as Rs 50,000 crores with the highest loss coming from the Aviation Sector, followed by the Roadways, in terms of lost Toll Taxes and Goods wasted on the road due to a sudden lockdown, grinding to a halt fully loaded trucks,” ICC said.
Though the government has allowed movement of both essential and non-essential goods, the situation is not so easy at the ground level, it said. Container freight stations, inland container depots, warehouses and port terminals, which are all notified as essential services, are getting choked due to slow evacuation of containers and cargo, it added.
“Moreover quarantining of ships for 2 weeks at high seas with delayed berthing is also adding to the chaos. Given the capital intensive nature of the industry, the standing cost of assets is very high, running into crores of rupees. A lifeline needs to be extended to the industry,” the chamber said.
It sought relief measures like digital permits and packaged food service from NHAI for drivers after every 50 kms and complete waiver of EMI obligations for at least 6 months till earnings normalise.
Demanding treatment of logistics industry as priority sector for lending — sanctioned soft loans and existing loans be rolled over at a lower rate, it also stressed the need for auto renewal of national movement permits till September 2020.
Besides, it sought a reduction in GST for the sector to lower than 12 per cent and waiver of revenue share and lease rental payable by PPP operators to government partners till September 2020 as well as waiver of minimum performance obligations of private operators till September 2020.
ICC also stressed the need for a government-sponsored health insurance cover for all employees of the sector and extension of construction period of ongoing PPP projects by 6 months to 1 year, besides allowing of GST input credit for such projects.
Source: Economic Times
