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Run-up to the Budget: Shipping
Shipping: State of the industry (2000-01)
- During the 2000-01 period, the financial performance of Indian shipping companies improved, due to a significant increase in freight rates and a marginal increase in seaborne trade.
- During the April-November 2000 period, India's seaborne trade increased by 3.3 per cent, due to an increase in exports. However, imports (largely of petroleum products) declined.
- During the April-January 2000-01 period, freight rates for dry bulk commodities remained firm, due to higher fuel costs and increased demand from the South-East Asian countries. However, freight rates did not increase between April 2000 and January 2001, as the increase in demand was balanced by an increase in fleet supply.
- During the April-January 2000-01 period, freight rates for crude oil and product tankers increased significantly, due to a significant increase in the seaborne trade of crude oil and oil products.
Shipping: Industry expectations from the Union Budget (2001-02)
- Higher rate of depreciation: The Indian National Shipowners Association (INSA) has asked for an increase in the rate of depreciation on ships, from 20 per cent to 40 per cent (on par with the rate of depreciation on other transportation vehicles).
- Tax concessions for shipping crew: The INSA has asked for an extension on income tax exemption. (At present, income tax exemption is available to employees aboard Indian ships plying in the international waters, and to employees of ships deployed near the Indian coast.)
- Option to pay income tax on the basis of capacity: The INSA has asked that shipping companies be given the option to pay income tax, calculated on the basis of their tonnage (fleet capacity), instead of paying taxes based on profits.
Shipping industry: State of the market
Mar 2000
|
|
Mar
2000 |
Jan
2001 |
Change(%) |
|
Total
capacity
(million
grt) |
7.09 |
6.93 |
-2.3 |
|
Dry
bulk
rates
($
per
day)1 |
8,600 |
8,000 |
-7.0 |
|
Product
tanker
rates
($
per
day)2 |
9,750 |
14,500 |
48.7 |
|
Crude
tanker
rates
($
per
day)3 |
14,250 |
21,000 |
47.4 |
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Net
forex
earnings
(Rs
billion)4 |
38 |
n.a. |
n.a. |
n.a.: Not available
1 40,000-45,000 dwt, built in 1985-1990
2 30,000 dwt, ten-year old
3 80,000-95,000 dwt, ten-year old
4 Figures are for 1999-2000
Source: CRIS INFAC
Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.
Rediff-CRISIL Budget Impact Analysis
Budget 2001
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