Home BusinessShipping min seeks to up goods traffic along coastal areas, inland waterways
To promote transport of goods along the coastline of the country and on national waterways, the Ministry of Shipping has written to the Ministry of Finance to exempt goods transported through such routes from service tax.
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A senior official at the shipping ministry said: “Though transportation of goods through inland waterways and coastal routes is energy-efficient, cost-effective and environment-friendly, traffic has remained low on such routes. We are undertaking measures to boost traffic through these means. At this time, the imposition of the proposed service tax would be a burden on customers and discourage interested users.”
The shipping ministry has not received any response from the finance ministry yet. Officials, however, are hopeful — since the finance minister had exempted goods transported through the railways from service tax — they, too, would receive a favourable response.
Though India has a coastline of 7,517 km, dotted with 12 major and 200 non-major ports, coastal shipping constitutes just 7 per cent of the total freight transport system. The share of goods moved through inland waterways is even lower, at less than 0.5 per cent, despite the country having nearly 14,500 km of navigable waterways.
To give a boost to the coastal shipping industry, the shipping ministry had proposed that a Coastal Shipping Development Fund of Rs 10,000 crore be set up and that the Union government extend another Rs 500-crore aid to develop coastal shipping services. A senior official at the ministry said: “The schemes have been put on hold as resources have not been made available yet.”
The ministry is looking to increase the share of coastal shipping in the country’s domestic trade to 15 per cent by 2025.
Inadequate infrastructural facilities — like the lack of the depth and width required for the movement of inland water transport vessels (IWTs), few cargo terminals, inadequate road-rail connectivity, a dearth of IWT vessels — have also hindered growth of traffic on the inland water transport network.
The shipping ministry is seeking private sector participation for acquisition of barges and construction of jetties on the inland water transport network. The official added: “We have already formed a joint venture with NTPC to transport coal from Haldia to their power plant in Farakka.”
Under the National Maritime Development Programme, Rs 10,500 crore have been earmarked for development of the inland water transport system. Of this, Rs 4,450 crore would be utilised for upgrading and making the five national waterways fully functional, Rs 1,000 core for development of state waterways and Rs 4,000 crore for acquiring vessels for cargo and passenger transport.