Budget Impact 2018 Logistics & Transportation Service Companies

Budget Impact 2017 - 2018 Infrastructure, Transportation & Logistics

Budget 2017 – 2018

Impact on Infrastructure, Transportation and Logistics

Perhaps for the first time in history an integrated infrastructure, transportation and logistics budgetary plan was presented by the FM blending in roads, railways, waterways and civil aviation. Also the railway budget was made a part of the main budget.

A comprehensive and symbiotic multi-modal transportation system plan and co-ordinated execution was important and augurs well, in the march to match up the growth objectives. Since infrastructure is the bedrock on which the logistics and transportation framework depends, both have to be seen in conjunction.

The FM has allocated Rs 3.96 lakh crore for infrastructure development which includes an allocation of Rs 2.41 lakh crore for roads, railways and ports in the Budget 2017-18.


The FM also unveiled the largest-ever rail budget of Rs 1.31 trillion, an 8.26% increase over the Rs 1.21 trillion allocated to the railways in 2016-17. Of the Rs 1.31 trillion, the highest-ever capital outlay for the Indian Railways, a gross budgetary support (GBS) of Rs 55,000 crore will be provided by the finance ministry.

The finance minister also announced the creation of a Rs 100,000Cr railway safety fund for a period of 5 years, which will be given as seed capital by the finance ministry, with the balance to be raised by the railways from other sources.

Indian Railways will also list its subsidiaries—IRCTC, IRFC & IRCON International on the stock exchanges to access capital.

The FM also said the railways will increase its throughput by 10% by upgrading dedicated corridors which have high traffic volumes. The Railways will lay down 3,500km of tracks in 2017-18 as compared with 2,800km in 2016-17.

In light of the falling freight revenues of the Indian Railways, Arun Jaitley announced that the railways will offer end-to-end transportation solutions for commodities. Indian Railways registered a 2.15% dip in December revenue earning to Rs 9,240 crore, compared with Rs 9,442.32 crore in December 2015.

An integrated approach to improving safety, cleanliness and passenger comfort, and higher levels of service to passengers and freight customers through end to end services have been introduced in this budget, to nurse the railways back to health.

Rural Roads

An allocation of Rs 19,000 crore has been made towards the Pradhan Mantri Gram Sadak Yojana (PMGSY) to connect far flung rural areas. The FM said the pace of road construction was 133km per day under PMGSY in 2016-17 as compared to 73km during 2011-14. The country has a road network of 3.3 million, the second largest globally. India has been constructing highways at a rate of 20-22km per day, and has the aim of speeding up the construction rate to 41km per day.

Coastal Roads

The Finance Minister Arun Jaitley said that around 2000 km of coastal roads have been identified for construction and development. This will help accelerate the development of Coastal Economic Zones, port infrastructure and also help in easing out bottlenecks of logistics movement.

Construction and Maintenance

The FM proposed that allocation for construction and maintenance for National Highways be hiked from Rs 57,673 crores to Rs 64,000 crores (Additional 10% increase). He said that the total length of roads built from 2014-15 is about 140,000 km higher than previous 3 years.

Air Travel

In his speech, the FM announced that select airports in tier-II cities will be taken up for operations, and development on PPP mode. He also announced a proposed amendment in the Airports Authority of India Act to monetize surplus land for the development of airports.

Skill Development

The FM said 100 India International Skill Centres will be developed across the country. The government plans to train 3.5 crore youth under the Sankalp program and the Pt. Deen Dayal Upadhaya Program.


No changes in service tax and excise duty as GST would be implemented as per schedule 1st July 2017.

Call us: +91 86550 12255
Email: sales@valueshipr.com

Leave a Reply