SPOTLIGHT ON INDIAN ELECTRONICS Spotlight on Indian Electronics | Page 65

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NET ZERO IMPORTS
B2B buyers – Revenue cost Rs. 103 crore, assuming no
Ÿ
Increased employment opportunities resulting from
incremental substitution of imports by domestic production.
increase in production
Scenario 2: Excise Duty of 2 % on domestically manufactured
Ÿ
Increase in content generation and innovation: Notebooks
finished goods with CENVAT credit of the 2 % tax to eligible
( NBs) and PCs are expected to continue to be the primary
B2B buyers- Revenue impact Rs. 323 crore, assuming 100 %
mode of content generation and India is expected to see a
substitution of imports by domestic production.
sustained demand driven by the IT industry.
These policy interventions by the government for the IT sector
Ÿ
Enhanced competitiveness of exports of IT products from
would also have the following positive impacts:
India
Ÿ
Help in immediate import substitution
While the revenue impact is modest, the policy interventions,
Ÿ
Increased scale of domestic manufacture of finished
particularly the fiscal benefits will go a long way in
products will attract component manufacturers to invest
encouraging domestic manufacture of these products in India,
and establish their presence in India to meet the local
in line with the“ Make in India” and“ Digital India” visions of the
demand.
Government.

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' Make in India ': A significant initiative
Among the World Bank predictions that the year 2016 could
that India will continue to expand at a robust pace and boast
be a year of“ perfect storm” for the world economy and a
of an economic growth of more than 7 %.
simultaneous slowdown in the BRICS countries, hope floats
Positive economic outlook for India( IMF World Economic Outlook Projections: April 2016)
The several reforms undertaken by the government have had a positive impact on the growth and investment into the country. Industry is hopeful that the progressive reforms process will continue to propel the economy.
However, there are concerns about the stagnation of the Indian manufacturing at low levels, especially when compared with the East-Asian successes. India’ s current strong economic performance is driven more by public investments and private consumption. The other two important components of the economic growth- exports and private investments- remain weak and have been a cause of concern. The weak private investment is evidenced from the fact that capital expenditures as a share of GDP have declined further from 5.4 percent of GDP in FY 2014 to 5.2 percent of GDP in FY 2015. 2 Indian
The global economic conditions are unstable given the prospects of rising interest rates in the US and a slowdown in China. India too is facing the challenge of falling exports. With the prospect of a negative growth in exports continuing for at least one more year,
Spotlight on Indian Electronics 2016 | 65