Fiscal discipline could take shipping to high seas

Indian shipping can witness considerable growth if the Government...

Indian shipping can witness considerable growth if the Government gets its fundamentals right and focuses on fiscal rationalisation, strengthen the regulatory mechanism and maritime training, states the 11th Plan.

On the capacity front, India may sail through troubled waters by acquiring vessels with enhanced capacity of 15 million gross tonnages with an investment of Rs 80,000 crore, if supportive measures are taken in the Plan.

“There is an urgent need to study the cumulative incidence of taxes on ships registered in India vis-à-vis the incidence in other jurisdictions so that necessary measures can be taken to reduce or eliminate the disparity in tax treatment,” the Plan notes. “It is critical for growth of shipping in India that a level playing field is created as compared to other regimes in respect of taxes.”

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The Plan hopes that India will continue its position as major human resources supplying nation to the maritime industry, retaining 6 per cent share of the global workforce and “additionally supplying 20 per cent of the current estimated shortages”. The Government may also review the restriction of recruiting only Indian seafarers to avoid any human resources shortage.

The Planning Commission has strongly recommended the establishment of marine disaster and emergency response system, “in view of the increasing traffic in territorial waters and a growing fleet”. In addition, it also recommended setting up of “Ballast Water Management System” in accordance with the requirements of International Convention for the Control and Management of Ships. It also proposed setting up of a regulatory mechanism for Offshore Supply Vessels during the Plan period.

Meanwhile, giving an impetus to coastal shipping, the Planning Commission felt there is a need to consider fiscal incentives for registered multimodal transport operators, shippers, trade/industries that prefer transporting sizable domestic cargoes through coastal shipping besides providing adequate rail and road connectivity to each port. The Plan will focus on putting requisite infrastructure on existing waterways to make it fully functional and also develop new waterways. By the end of 11th Plan, three new National Waterways will be added, taking the total coverage to 4,500 km.

In a direction to Ministry of Shipping, the Plan has asked it to formulate its budget in keeping with the development of high priority waterways and its phased growth.

PLANNED SAILS

•Establish marine disaster and emergency response system

• Setup ballast water management system

•Setup regulatory mechanism for offshore supply vessels

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• Increase cooperation with Bangladesh for achieving higher exports, better connectivity to north eastern region