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