Transportation and logistics companies have welcomed the budgetary announcement of upgrading 50,000 km of state highways into national highways.

The companies believe that better roads will lead to a reduction in operational costs, which will have a positive impact on net earnings.

India has a road network of 48.7 lakh km; the national highways constitute only two per cent of this network but carry 40 per cent of the traffic.

Bhavik Chinai, Chief Executive Officer, Vamaship, an integrated logistics company, said the Centre’s plan to would help bring down trucking costs significantly. Improved fuel efficiency and reduced maintenance cost for trucking companies would reduce prices for long distance transportation, he said.

Chinai said the announcement of deferred customs duty payment for large importers would help them plan their logistics efficiently, potentially increasing the number of shipments and facilitating trade.

Areef Patel, Vice-Chairman, Patel Integrated Logistics Ltd, said a higher allocation for creating road transport network is a key driver for the overall development of the transportation sector.

More focus on highways will ensure faster movement of goods across the country thus lowering cost of operations.

The move towards better utilisation of ports, developing rural infrastructure and abolishing multiple tax system will bring fresh impetus to logistic and transportation sector, he said.

Gurprasad Kohli, Managing Director of Wallenius Wilhelmsen Logistics India, pointed out that more highways will have a positive effect on India's competitiveness as a manufacturing powerhouse.

It will bring about better connectivity from the hinterland to ports and encourage manufacturing growth in landlocked states.