The Hindu Business Line : Road transport sector not to get any direct benefit

Most of the budget proposals which appear to be related to the road transport sector are impact neutral, according to sources close to the sector. There is nothing in the budget to offset the impact of recent diesel price hike slapping burden on the road transport operators.

The concern is widespread because with the monsoon breaking over almost all parts of the country, the business will be low for the next few months.

None of the proposals presented in the Budget – there are quite a few of them – will have direct benefit to either the road transport companies, their agents or the operators, it is pointed out. For example, with hardly any petrol truck plying on the roads, the proposed excise duty cut on such trucks will benefit few, it is felt.

Benefit for exporters

Next, the exporters receiving services from goods transport agents and commission agents will now be exempted from payment of service tax. The proposed exemption will benefit exporters, not the transporters or their agents who wonder if the same benefit would not be extended to the domestic trade also.

The exemption to private contract carriage permit holders from the payment of service tax will benefit only those who transport passengers, not goods.

A 23 per cent increase in allocation of funds to NHAI for NHDP, according to road transport operator, is a welcome decision provided the promises are delivered. There was a time when the role of NHAI left much to be desired, largely because of political interference, with the power-that-was being only interested in changes at the top in the organisation than anything else. Also, the proposed 59 per cent allocation for Pradhan Mantri Gram Sadak Yojana will yield desired benefits if the funds are allocated and projects implemented on time. After all, the State Governments are also involved in the implementation of the PMGSY projects.

level-playing field

Some road transport companies are happy that the an attempt has been made to provide a level-playing field by proposing to bring railways, coastal operators and inland water transport companies also under the ambit of service tax. The proposed measure, it is pointed out, will set right a major disadvantage the road sector suffer from vis-À-vis other modes, particularly railways. But it is interesting to note that despite higher freight cost vis-À-vis the railways, road transport sector accounts for almost 79 per cent of the market share as against railway’s 21 per cent.

The Railways, it is felt, should not crib because the proposed levy will not be applicable to transportation of essential items or goods for mass consumption. A section of road transport operators is of the view that the expert group, proposed to be set up to advise on viable and sustainable system of pricing of petroleum products, must have statutory powers to announce and effect the price changes as soon as the situation so warrants and must be independent of government control. The proposal for such a group has been in the air for some time and something concrete might emerge this time, it is observed.

According to Mr Vineet Agarwal, Executive Director Group TCI, the plans to extend investment-linked tax incentives for setting up and operating cold chain , warehousing facilities for storing agriculture products is an encouraging move.

“An appreciable feature of the budget for the industry is the increase in the monthly income from Rs 3500 to Rs 5000 for goods transporters engaged in small businesses. The budget gives more flexibility to transport companies for payments made for plying, hiring or leasing goods carriages, the ceiling of Rs 20,000 has now been increased to Rs 35,000.

“We are glad that the Economic Survey hhas highlighted the need for a single regulatory body for the transport sector (inlduding highways, railways, ports and airports) which we have been demanding for long. This will bring in the desired checks and balances and ensure transparency.”

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