The government presented the Budget on February 1, 2019. This year’s budget is an interim one and is expected to be followed by a full one in July 2019. Piyush Goyal, the interim finance minister, presented the budget, as Arun Jaitley, the finance minister is in the US for medical treatment.
There were no major announcements directly targeted at the consumer electronics industry, however, there are a few initiatives that could provide impetus which include:
- 1 lakh digital villages planned to be developed in the next 5 years;
- All assessment of IT reforms to be done electronically in the next 2 years;
- A National Artificial Intelligence Portal to be launched shortly by the government; and
- GeM to be extended to all central public enterprises.
“The interim budget for 2019-20 has focused on farmers and the middle class and should boost consumption. Full tax rebate for income up to 6.5 lakh will boost sentiments and we foresee a rise in demand for the mass segment of consumer durables. Rural electrification which aims to touch every household by March 2019 coupled with infrastructural push via Gram Sadak Yojana and the rural support schemes will serve as a catalyst in improving the demand for consumer electronics and appliances. Governments continued attention toward skilling will help improve the quality and quantity of skilled labor. We also welcome the government’s attention toward climate change and clean energy. We are committed toward the success of the energy efficiency regime and will continue to support the government in this area. The FM also talked about the vision of making India a USD 5 trillion economy in the next 5 years and a 10 trillion dollar economy in next 8 years thereafter. We would like to affirm that electronics, appliances, and AI industry will serve as major growth drivers in the achievement of this objective. We hope to hear some major announcements in the full budget which may provide the desired support to the ACE Industry and electronic manufacturing.”
President – CEAMA,
Business Head and Executive VP – Godrej Appliances
“The focus on national program on AI will unleash large opportunity in intelligent electronics and automation and will create new business opportunity in nine focus areas. This being an interim budget, some of the large scale investments needed in semiconductor and electronics for building a digitally secured India should be taken up post-election.”
Rajesh Ram Mishra
India Electronics and Semiconductor Association
“For the electronics sector, while there is nothing specific, the announcement to make 1 lakh digital villages over next 5 years will certainly give a boost and the National Artificial Intelligence Portal should support the development of state-of-the-art technology.”
“The imposition of the duty on open cell panels is against the government’s phased manufacturing program, which serves as an investment roadmap for the industry. The duties were supposed to be levied much later when open cell fab production starts in the country. Since there is no domestic manufacturer of panels in India, this duty serves no purpose and instead will burden consumers with prices going up.”
“It is good to see that there has been a significant push to boost the Make in India initiative.”
Head of Corporate Marketing,
“In the final budget we expect an exemption of basic customs duty on open cells (from 5% to 0%) to give the necessary thrust to the market, uplifting the overall sentiments thereby, resulting in an increased demand for televisions. Further, it will help pave way for a larger roadmap for the component manufacturing ecosystem to be achieved through a phased manufacturing program (PMP) for TVs, which in turn will help reinforce GoI’s larger, Make in India visions. TVs today, have moved from being an item of luxury to one of our necessities, hence, its affordability is key. Therefore, in order to drive further penetration whilst progressing toward a manufacturing based economy, we urge GoI to lower the GST slabs for TVs (above 26-inch) and other energy efficient appliances.”
Co-chair, Electronics Committee,
“Along with the recent reduction in GST on appliances, this anticipated increase in consumer spending can be a catalyst for higher demand in our sector.”
Whirlpool of India
“The interim budget 2019-20 presented by the finance minister will give a boost to India’s growth story, primarily focusing on middle and lower middle class segment of the Indian society. The exemption provided in the tax for individuals with salaried income of up to Rs 5 lakh, clubbed with subvention schemes for farmers who cannot afford to repay loan shall propel demand growth in both rural and urban areas thereby paving way for overall growth going forward. In addition to enhancing individual’s disposable income, initiative toward enhancing the digital penetration in the villages across the country shall have great potential of sustaining overall demand scenario for consumer durables industry in coming time.”
Bajaj Electricals Limited
“The Indian government has been very supportive to the TV manufacturing industry and the recent reduction in GST has proven to be a great example. In a move to promote domestic manufacturing, we are expecting FM to reduce customs duty on open cel’ used in the manufacturing of LCD and LED television panels to 0 percent from the current 5 percent. As a lot of brands have started importing TVs from ASEAN countries under FTA; major brands have stopped manufacturing televisions in India. This has impacted the Make in India initiative to a larger extent, close to which 1 million TV units have already been imported this year under FTA.”
Avneet Singh Marwah
Director and CEO,
Super Plastronics Pvt. Ltd.
“Agriculture, infrastructure, healthcare, and rural development seem to be the key focus areas of the budget 2019. We do not expect any immediate impact on consumption, either negative or positive. There is no real additional money in the hands of the middle class with which consumption can improve. However, the basic necessities of the poor in the country will be met because of the various schemes announced. The proposed reduction in corporate tax to 25 percent for MSME companies with turnover up to Rs 250 crore is a welcome move, which will benefit a large number of retailers. They will be able to save on taxes that they would have otherwise paid at a higher rate. Overall, the budget is pro-poor, and one with a long term impact with no immediate benefits for the retail sector.”
Retailers Association of India
“Overall budget is very positive for the middle class, as the government has put in more disposable income in the hands of the middle class of the country. This is much needed for a long time. On the other hand, there is a good balancing act done to the agriculture sector, which would bring in much need relief to farmers of the country. Increase in disposable income in the hands of both the middle class and rural India is definitely going to spur demand for consumer durables goods like televisions, air conditioners, and washing machines. This move is definitely positive for us. The government should have worked on selective Free Trade Agreements (FTA) with countries like Korea, Thailand, Vietnam, and Malaysia for agricultural products rather than encouraging duty free import of consumer durables from these countries. The recent move of the Government of India to reduce customs duty on goods imported from Korea from 6.9 percent to 6.3 percent and from Vietnam, Thailand, Malaysia and Sri Lanka to zero is detrimental to Make in India initiative of the company. On one side the Government of India has been promoting Make in India and on the other side entering FTA with these countries, which will not encourage the growth of manufacturing in India.”
Mirc Electronics Ltd.
“We, at Micromax, respect and welcome the government’s budget reforms. This year’s budget has brought significant changes, focusing on various key aspects which are largely stressed upon our overall economic growth – rural, agriculture, job creation, healthcare, housing, structural reforms and infrastructure development, which will help stimulate and strengthen the Indian economy. The emphasis on establishing a program to bring in direct efforts toward building a holistic ecosystem for artificial intelligence is an impressive development.”
“Given the limited space of an election year budget, we in the industry are looking forward to a growth impetus in the form of lower taxation, demand push and easier access to credit. The budget delivered well on these expectations. 25 percent reservation for MSMEs in government procurement is a positive step indeed.”
Deki Electronics Ltd.