Read what manufacturing industry experts have to say on the Union Budget 2018-19.
Union Budget 2018-19 presented by Finance Minister Arun Jaitley proposed reduction in corporate tax for entities with turnover of up to Rs 250 crore to 25 per cent. This expected to drive the much-needed growth for MSMEs across sectors as well as the Indian machine tool industry which has a significant number of MSMEs. This is also expected to help the ease of doing business besides generating jobs.
The budget also made allocation of Rs 3,794 crore to MSME sector for credit support, capital and interest subsidy on innovation which boost the local manufacturing because the main issue for MSMEs are to arrange funds and they are not easily available based on their credit ratings.
Some of the major highlights of Union Budget 2018-19 are as follows:
• To boost local manufacturing, Finance Minister announced customs duty on mobile phones increased from 15 per cent to 20 per cent.
• Great boost to local manufacturers by declaring ninety-nine cities with an outlay of Rs 2.09 lakh crore under the Smart City programme.
• This budget has reduced the income tax rate to 25 per cent for all companies having a turnover of up to Rs 250 crore.
• Under the mid-term review of Foreign Trade Policy (2015-20) has increased export incentives available to labour intensive MSME sectors by 2 per cent.
• New electronics manufacturing policy suggested under Ministry of Electronics and Information Technology with aim to create an ecosystem of manufacturing in the country.
• Liberalisation of arms rules to boost ‘Make in India’ manufacturing policy of the government, the policy is expected to encourage investment in the manufacturing of arms and ammunition and weapon systems.
• Initiatives under the ‘Make in India’ to give a push to the domestic manufacturing of mobile handsets.
Commenting on the overall significance of the budget, IMTMA President P. Ramadas said, “Government of India with this budget has tried to establish harmony between demands rising from various sectors and bringing some kind of a fiscal discipline to meet the country’s economic goals in the long-term. The aim to bring down the fiscal deficit to 3.2 per cent of the country’s GDP in 2017-18 will help the country’s manufacturing growth in the long run.”
IMTMA’s Director General and CEO, V. Anbu said, “The reduction in corporate tax rate for MSMEs is a positive development since many of these units operate within prescribed limits. The incentives spelt out in the budget will bolster these units to enhance their production capacities.”
To promote local manufacturing
The current budget is a well-balanced one, given the existing circumstances and long-term growth of the nation. Vineet Seth, Managing Director – South Asia & Middle East, Mastercam India Pvt Ltd said, “The Union Finance Minister mentioned in his budget that this year’s budget focuses on agriculture and rural economy. It also aims to keep the fiscal deficit under check, which is a very positive move. I’m confident that industrial growth in terms of local manufacturing will happen in our country and that it’s a collective effort.”
Mahesh Tyagi, Managing Director, Heller India, says, “Local manufacturing set-ups are eager to spend money and compete in the world by pursuing ‘Make in India’. After budget, we are seeing significant enquiries about machine purchase and customers are asking for the fast delivery in terms of enhancing their capacities.”
Die and mould industry should enhance delivery models
According to K. Manickam, Managing Director, CAD Macro Systems, the union government is very much supportive to local manufacturing through its ‘Make in India’ initiative in these years. Now, in Manickam’s opinion, it got further momentum by the increase of customs duty on mobile phones and other electronics items from its current 15-20 per cent. This eventually would support domestic players as the OEMs in any vertical would prefer local vendor network instead of importing options. Manickam adds, “This is the time the die and mould industries, the parent system of manufacturing should enhance their delivery models by adopting new technologies, relevant automation and implementing productivity improvement tools like tool room ERPs in their machine floors.”
Budget 2018-19:An echo of ‘‘Make in India’’
Nitin Wakode, Associate Vice President PSG, Onward Technologies Ltd. observes, “The budget 2018-19 surely can be considered as echo of ‘Make in India’ campaign in true sense. There was appropriate thrust on factors which generate conductive environment of manufacturing for local and global manufacturers locally. We can call it as an industry-friendly budget considering creation of conductive environment and opportunities for manufacturers and traders as well.”
Vikas Khanvelkar, Managing Director, DesignTech Systems Ltd points out, “There are no special steps to grow the exports. How 15 per cent growth in exports will be achieved is not clear. Creating employment should have been one of the thrust factors, but except big outlay in infrastructure projects which will lead to large employment creation, no other measures are taken to make up the employment deficit from other sectors.”
After budget we had seen significant enquires about machine purchase and customers are asking for the fast delivery in terms of enhancing their capacities.
MD, Heller India
The reduction in corporate tax rate for MSMEs is a positive development since many of these units operate within prescribed limits.
Director General and CEO, IMTMA
I’m confident that industrial growth in terms of local manufacturing will happen in our country and that it’s a collective effort.
MD – South Asia & Middle East, Mastercam India
We can call it as an industry-friendly budget considering creation of conductive environment and opportunities for manufacturers and traders as well.
AVP PSG, Onward Technologies Ltd.
This is the time the die and mould industries, the parent system of manufacturing should enhance their delivery models by adopting new technologies, relevant automation and implementing productivity improvement tools.
MD, CAD Macro Systems
There are no special steps to grow the exports. How 15 per cent growth in exports will be achieved is not clear.
Managing Director, DesignTech Systems Ltd