The Indian IT-Electronics sector said the Budget gives push to domestic electronics manufacturing, however, the MSMEs from the sector have raised concerns that domestic value added manufacturing is not supported by the budget and it will encourage imports.
Noting that the budget does not have solid impetus for Make in India, BS Sethia, Past President Electronic Industries Association of India (ELCINA) and Co-Chairman Policy Committee said, “Domestic value added manufacturing is not supported by the budget and it will encourage imports especially of POS Machines, Micro ATMs and Scanners to promote cashless economy as all duties including BCD, CVD and SAD have been waived.”
The industry had recommended differential duty or imposition of BCD on the finished products to give an immediate boost to their assembly. Waiver of all duties will result in a flood of imports without enabling creation of a local industry and a big opportunity for manufacturing these products in the country would be lost, he added.
Rajoo Goel, Secretary General, ELCINA said, “In case of LED Lights, Fixtures and LED Drivers and its parts, BCD has been prescribed at 5% and CVD/Excise at 6%. Almost all mechanical and electromechanical parts as well as LED Drivers for LED Lights are manufactured in India in good number. It was subject to 10% BCD. Reduction of BCD to 5% on these would result in raising imports of these parts.”
“Further inputs of LED Drivers have been brought under 5% BCD though presently these are at zero BCD as all are ITA bound. While this could help in enhancing local sourcing of components such as capacitors, resistors, pcbs and connectors but imports are likely to happen without actual user condition to avoid the 5% BCD. The objective of greater local value addition and local sourcing of inputs for Drivers would thus be obviated,” further elaborated Goel.
Meanwhile, Debjani Ghosh, Managing Director of South Asia, Intel and President, Manufacturers’ Association for Information Technology (MAIT) said, “We are happy that the budget has laid primary emphasis on digital economy across development areas highlighted by the Finance Minister. Digital economy is now the key enabler for important development initiatives including cashless transactions and government is focusing on last mile connectivity and network penetration across India to further bolster idea of Digital India.”
While government is giving push to domestic electronics manufacturing, Nitin Kunkolienker, Vice President, MAIT and Director -Corporate Affairs, Smartlink Network Systems stated, “The extension of concessional Excise and Customs Duty benefits were not extended to all ITA goods to make manufacturing far more sustainable in India. The extension of the duty differential scheme to the PC segment would have definitely taken India one step closer to making it an export hub and achieving the vision of Digital India as PCs are used to achieve economic growth as opposed to mobiles which are consumption devices.”
“We will have to engage further with the government in this area,” further added Kunkolienker.
By EB Bureau
