Union Budget 2016-17 – Key Expectations for Consumer Electronics Segment and technologyby Girish Kannan February 29, 2016
The last week of February 2016 is going to be a game changing week for the Indian citizens and come February 29th the fate of the Indian citizens would be sealed for at least the next three years. How you may ask? You may have probably even guessed it by now where this is leading to? Well, I will say it any ways, February 29th is the day when the Union Budget 2016-17 will be tabled at the parliament by the Union Finance Minister of India, Arun Jaitley. (If you didn’t know this yet, God Bless! Your ignorance) and if you are already aware, then I am sure you must have turned Aryabhatta already and started doing your math and calculating your taxes (how to save) and prepare your own home budget to meet your ends meet.
We at CompareRaja, got down to do what we do best researching on what the budget is likely to be for the Indian consumers and chart out some of the highlights in the electronics market segment.
1. Exemption from basic customs duty
With the Union Budget just around the corner, industrial experts and financial analysts suggest that, the budget might bring rejoice to the electronics segment in the country.
The Consumer Electronics and Appliances Manufacturer Association (CEAMA) have sought a review of the customs duty structure, including exemption of tax levied on the key parts required for manufacturing of products like washing machines, air conditioners and refrigerators. If the request is accepted by the Finance Ministry, it would give a huge boost to domestic manufacturing and reduce the prices of the electronics.
2. Reduce import duty
The inverted duty structure is another important aspect that is considered to be debated upon, as it attracts more duty on raw materials than the finished product. The finance ministry has been facing severe flaks from the Appliance and Consumer Electronics Manufacturers in India to reduce the import duty on certain products.
3. Extend Special Additional Duty (SAD)
Furthermore, the 2016-17 budget is expected to extend the SAD (Special Additional Duty), which will curtail the domestic manufacturing scope.
4. Revise GST rates
Some of the industrial experts and manufacturing companies’ owners feel the GST rate should be revised and it must be in line with the rates prevalent in other Asian countries that range from 6% to 17%.
5. Manufacture in India – encourage small business
Currently the value of LCD panels that are imported for applications like smartphones, TV is to the tune of INR 10,000 Cr (approximately). The experts suggest that by providing an environment that is conducive for the manufacturers in India itself, the imports substitution can be achieved. This will also encourage small time business people in the country to set up component manufacturing units. This will ensure fast development in the LCD panels manufacturing eco-system. Knowing Mr. Modi’s penchant for strengthening the Indian manufacturing sector, a positive step can be expected when the budget is presented on February 29th.
6. High Energy Efficiency products
According to the experts, to encourage manufacturers to produce high energy efficiency rated products, an incentive scheme should be introduced.
7. Financial aid for animation and gaming
Such IT based student financial aid scheme will help foster a culture of innovation, research and development. It will also positively impact the Indian IT ecosystem.
8. Concessional duty rates – Cheaper Products
This would reduce manufacturing cost and the subsequent product will be cheaper. Win-Win situation for both consumers and manufacturers!
Image Source: freedom251.com
9. Support for technological infrastructure
It is no secret that the Prime Minister of India, Mr. Narendra Modi has always been keen to develop the IT and technological infrastructure in the country. The launch of the Freedom 251, the world’s cheapest smartphone, is a perfect testimony to that vision.
To promote programs such as Digital India, Stand-up India, Start-up India, Skill India, the budget should focus on providing improved connectivity, digital literacy and access to technology.
10. Smart cities
It would be no wrong to assume that the upcoming union budget would focus more on the development of ‘smart cities.’ The ideal of 98 ‘smart cities’ that was proposed in the last budget, it can be expected to see some real action towards making the smart idea a reality.
So, in a nutshell, the Indian consumer electronics segment can expect some good news within the next few days.