ELCINA lauds positive steps for Electronics Manufacturing in the Budget

The Union Budget has largely met the expectations of the Electronics Systems Design and Manufacturing (ESDM) sector with a number of changes in the Indirect tax structure to strengthen manufacturing of IT Hardware and mobile phones. There is a clear indication that the differential duty structure for mobiles and tablets which was introduced last year is being taken to the next level by including components and parts for chargers, batteries, wired head sets and speakers to nil duty on actual user condition . Reading the finer details of tax proposals it is clear that a number of duties have been rationalised to promote manufacturing of a wide range of products such as routers, modems, set up boxes, DVR, NVR, CCTV cameras and others. Basic Customs Duty on some of the components which are not covered under ITA-1 has been re-introduced.

Another step is the introduction of SAD on populated PCBs for a variety of equipment which will surely increase EMS activity in the country and drive up the demand for components.

The Budget lays right emphasis on domestic manufacturing to facilitate the Prime Ministers pet project “Make in India”. It will provide the much needed fillip to accelerate growth and generation of jobs which is acutely lacking today.

ELCINA President Mr. Vikram Desai has expressed happiness that given the challenges the Finance Minister has to contend with to meet high expectations of various sectors of the industry, SME’s, big corporates, the middle class and social sectors, the Budget has come up to our expectations. Mr Desai appreciated that the Finance Minister has drawn a roadmap for relief to all sectors as the GDP growth gets accelerated leading to higher revenues available with the government.

While complementing the Finance Minister for his sincere efforts to bolster local manufacturing, ELCINA Secretary General , Mr. Rajoo Goel said that one challenge which would confront local manufacturers of components is that all components, parts and inputs had been brought to nil BCD, CVD and SAD and this could create obstacles for them.

One of the long standing demands of component manufacturers had been simplification of procedure for import of inputs at zero duty under Customs Notif. 25/99 which has been highly cumbersome and has continued to baffle and confuse the industry. It is noteworthy that a Notification superseding the erstwhile Rules of 1996 has been introduced and hopefully this will simplify the procedure considerably and encourage the component manufacturers.

Overall the Budget has given the right focus to the farm and rural sector and has a clear social leaning to provide for uplifting the lower strata of our society. There are a number of positive steps taken for enhancing farmers’ welfare, who will have protection schemes, promoting skill
development and education and above all there is a massive increase input spending on infrastructure development amounting to Rs.2,21,000 crores.

With careful implementation, ELCINA believes that this Budget with give the right direction for the overall growth of the Indian economy and encourage investments in ESDM Sector.