Punjab’s logistics policy in the final stages, aims to bring down state’s logistics cost to 8%

To strengthen the viability of goods produced in the state by reducing logistics costs from 13% to 8%, the Punjab Government is in the process of finalizing the state’s logistics policy. The Integrated Logistics and Logistics Park Policy is getting its final touches from the industries and commerce department for approval from the state cabinet. The policy will offer fiscal and non-fiscal incentives for investments in multi-modal logistics parks, transport centres, wayside amenities, specialized warehouses in border districts, and specialized commercial vehicle fleets.

The final draft of the policy pitches logistics as a thrust area, identifying it as an eligible service enterprise for fiscal incentives, including reimbursement of state goods and services tax (SGST), employment general subsidy, and exemption from a change of land use charges (CLU) and external development charges.

“The concurrence of the finance department has been received. Comments are awaited from three to four other departments. After their observations are received, the proposed policy will be taken to the cabinet for approval,” said a senior officer privy to the developments told the media. 

Principal Secretary, industries and commerce, Dilip Kumar asked these departments to send their comments on the proposed logistics policy within two days. The draft logistics policy was put in the public domain on January 27, 2022, for feedback from the industry and other stakeholders.

Chief Secretary VK Janjua, while chairing a meeting on preparations for the Progressive Punjab Investor Summit 23 in February 2023, asked the departments to finish their work and have the industrial, logistics, and information technology policies in place before the meeting. Under PM GatiShakti’s program, the central government had also asked the states to formulate their policies to shore up logistics. The policy focuses on logistics for export and agriculture, freight smart cities, logistics parks, and the development of warehousing facilities.

Multi-modal logistics parks (MMLPs) and logistics units with minimum fixed capital investment (FCI) of ₹100 crore or direct employment generation for 250 persons will be treated as anchor units. They will be entitled to investment subsidy by way of 100% reimbursement of net SGST for 15 years subject to 200% of FCI, local employment generation subsidy at ₹36,000 per employee per year, and ₹48,000 per employee per year for women and SC/BC/OBC staff and 100% exemption from for 15 years. Similarly, logistics parks with a minimum area of 25 acres will be allowed with a total investment of at least ₹25 crores.

A minimum of 85% of the total area is to be used for logistics services and within this 20% will be permitted for industrial activities. No CLU or EDC will be levied on any component of the logistics park except for commercial activities. Trucker parks and wayside amenities with a minimum of 10 acres, located along or at a distance of two kilometres on either side of national or state highways are also proposed with 100% exemption from CLU and EDC and reimbursement of stamp duty. Incentives have also been proposed for specialized commercial vehicle fleets and warehouses in border districts.