Technology
Prior to the budget, CEAMA President Manish Sharma said, " Streamlined to government ' s Make-in-India vision, the industry expects( the government) to increase the BCD( basic customs duty) on GST ACE( appliances and consumer electronics) goods from 10 per cent to 20 per cent to discourage imports of these goods”.
Despite suffering a setback on account of demonetization, the consumer electronics and appliances industry is optimistic and says that the industry, " is presently in the right momentum and is expected to grow at CAGR 9.5 per cent from 2015 till 2021”.
However, when expectations are riding high in every sector, shadows of disappointments is likely to make appearances.
" It is not consistent with respect to the request of Rs 1.26 crore investment proposal. The M-SIPS application date will end in 2018. If we calculate on the basis of 25 per cent subsidy on capital expenditure then, as per our observation, projects worth Rs 3,000 crore can be implemented in 2017-18 ", Rajoo Goel, Secretary General, Electronic Industries Association of India, reacted.
With the focus on strictly creating an indigenous infrastructure for domestic component production, the government has increased 2 % special additional duty( SAD) on the import of printed circuit boards( PCB’ s) terming the move as an attempt to ' provide adequate protection to domestic industry '.
Although, this will lead to increase in prices of low-cost mobile phones in around same proportion, but in long run, the domestic PCB industry will start to evolve as requirements are to swell up in coming times, with a good number of manufacturing plants already here in India.
The same effect was initiated in the last budget of 2016-17, however, with the industry still at a nascent stage and underprepared for manufacturing indigenous components, it was called off.
However, extending in differential duty on the mic, receivers, metals and plastics, keypad and USB cables has been avoided as demanded by handset manufacturers proposed under phase manufacturing programme-2.
" Phased manufacturing programme is at the heart of the development of the mobile ecosystem to achieve a target of 500 million handset productions by 2019 and export target of 120 million mobile phones by 2019-20. Though the budget does not talk about it, we expect it to be raked up during debate," Indian Cellular Association( ICA) National President Pankaj Mohindroo said.
Expressing his disappointment, MAIT Vice President Nitin Kunkolienker said,
" The budget has been a big disappointment for us. It could have brought in consumer premise equipment, personal computers, servers under differential duty which could have had multiplier effect on manufacturing in the country. This would have brought value chain in manufacturing of computers in the country."
After the sudden demonetization of currencies, which various sections claim to be a hasty action taken on the part of the government, the market is left with a sudden and huge need for digital payment options.
As a measure to troubleshoot this sudden requirement, the government removed all duties on devices used in the process of
cashless transactions like ' point of sales ' machines, fingerprint readers etc. to push digital payments and components used to make them.
This comes as a major irony to the whole Make in India drive according to many sections in the industry. " Waiver of all duties will result in a flood of imports without enabling the creation of a local industry. A big opportunity for manufacturing these products in India would be lost," ELCINA Co-Chairman Policy panel B S Sethia said.
In a recent report from the Commerce Ministry, an increase by 26 per cent to Rs 26,757.59 crore in January on imports and exports reduction in by 10 per cent to Rs 3,162.73 crore has been marked.
The government also reduced basic customs duty from 10 % to 5 % on all parts for manufacture of LED lights or fixtures, including LED lamps, subject to actual user condition-- a move that industry opines will increase more imports.
With the current temperament of the present government, things might seem to be taking place too fast. But here Indians aren’ t to be blamed, as after years of monotony and inactivity, sudden implementations of speedy actions and unexpected changes, do take a time to process.
The electronics market is any way projected to grow at a compound annual growth rate( CAGR) of 24.4 percent during 2012-2020. Total production of electronics hardware goods in India is estimated to reach US $ 104 billion by 2020.
The Union Budget 2017-18 is any way inclined towards pro- domestic-manufacturing, in larger terms. And taking in regards the other factors, such as increase in domestic demand for consumer electronics in developing countries in Asia-Pacific, where India is a key player, increase in consumer awareness regarding niche innovative technologies, and an ever growing industrial sector, these cumulated factors would play the role of catalyst in keeping the market in India growing ahead in coming times.
ELE Times | 58 | March, 2017