ASSOCHAMs Budget Expectation towards a Port led Development

Port development is bound to act as a propeller for export oriented industries.

July 07, 2014 10:04 IST | India Infoline News Service

ASSOCHAM welcomes Union Governments vision to evolve a model for Port-led development to transform Indias coastline into a growth catalyst. In the upcoming Budget, I am hopeful that the Finance Minister will consider the following long standing demands of the industry-

  • Reduction incustoms duty on import of equipment for port projects
  • Exempting port projects from MAT and DTT
  • Granting infrastructure status to the industry

While these would offer a short term solace to big-ticket port projects adversely affected by procedural and approval delays over the last 2 years, I recommend the Government to shape a longer term strategy towards the sector. Towards this, I recommend following initiatives.

Togetherness in development

  • Private and public sector need to partner to create capacities in the sector. A PPP-based policy to encourage port development and management needs to be carved via BOOT (Build Own Operate Transfer) structures.
  • New Ports can collaborate with India Inc. to guarantee flow of traffic on the lines of the recent agreement signed between Ennore Port and Ford India Pvt for export of Ford cars

Give Tariff freedom

To generate ample private sector interest, there is a need to introduce market-linked tariff rates

Propel Trade & Industry

Port development is bound to act as a propeller for export oriented industries. Coastal SEZs/investment regions/ clusters along the lines of Chinese model of coastal development must be incentivized

Promote Tourism

The Government has placed significant emphasis on developing tourism in a bid to build Brand India. Keeping in mind high income and employment multipliers of the sector, a specialized policy for port-tourism can be carved out.

Ports can be used to create state-to-state tourism circuits such as the Gujarat-Mumbai-Goa route.

Establish India as a Tidal Energy hub

Among many firsts, Gujarat Government is developing Indias first tidal energy plant of 50 MWs. As a long term strategy to reduce dependence on coal and to meet future energy requirements, India needs to diversify its energy sources. At present, India has no policy on tidal energy. A clear policy along with clarity on tariffs and commercial development of tidal energy must be the focus of the new Government.

Tripartite development: Port-Road-Rail

To improve transit time and reduce congestion at ports, there is a need to complement port development with hinterland connectivity via a rail/road network.

With Roads, Shipping, Railways ministries coming under the aegis of a single Transport ministry, the development of the envisaged multi-modal transport system should be simpler

At present, most Indian ports suffer from capacity constraints, long turnaround time and poor productivity. The average TAT at Indian ports is between 2-5 days compared to 4-6 hours in other countries such as Hong Kong and Singapore. Reforms in the sector need to be multi-dimensional to create synergies between port development on one hand with trade, industry, infrastructure, tourism and energy sectors on the other, to enable a strong revival in economic growth.

Rana Kapoor, President, ASSOCHAM

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