Manufacturing sector frowns at Budget

NEW DELHI, INDIA: The manufacturing sector is less delighted with the reduction of duties on import of raw materials, announced in the Union budget on Friday by Finance Minister P Chidambaram.

R Zutshi, deputy managing director, Samsung India, said that the budget has given some benefits to the common man in terms of reducing the threshold limit of personal income tax, but has not really met the demand of the consumer electronics industry.

He said that some concessions that have come to the sector have been in the form of CENVAT reduction from 16 per cent to 14 per cent, the reduction in customs duties on convergence products from 10 per cent to 5 per cent and the reduction in duties on project imports from 7.5 per cent to 5 per cent.

“However our demand from the government to support manufacturing of consumer electronics in the country by reducing the import duties on raw materials like steel, copper and other inputs as well as removing certain anomalies in terms of duties have not been met. I do not see the budget really having any impact on the prices of consumer electronics products,” Zutshi said.

MAIT welcomed the thrust given in the Union Budget to sustaining the national economic growth and making it inclusive.

Vinnie Mehta, executive director, MAIT, said, "We welcome the government's decision to maintain the current levels of custom duty and a two percent reduction in the mean CENVAT rate (Excise duty/CVD) on all IT products to 14 percent from 16 percent, while the excise duty on computers continues to be 12 percent."

“Being an IT company, increase in budgets for Sarva Shiksha Abhiyan and Defence should mean increased business potential for us as these are important market segments for our business. However, no reductions in the peak rates of custom duty come across as a dampener as the visual display products fall under the peak rate of custom duty,” Hemant Agarwal, country business manager, VIVITEK Visual Display products said.

Commenting on the budget, Rakesh Bharti Mittal, vice chairman, Bharti Enterprises said that for the manufacturing sector, the total reduction of excise duties by 2 per cent would give a welcome boost to the sector.

He said that the exemption of specified parts of set-top boxes from custom duties is indeed commendable and would help in reducing the costs for customers.

“Through this budget, the Finance Minster has strove to uplift the social sector in the country by emphasizing on education, healthcare and agriculture, which deserves a thumps up,” Mittal said.

Moon B. Shin, managing director, LG Electronics India, saw little changes in the product pricing on consumer electronics.

He said that there would not be any major changes in terms of product pricing, as there has been no major relief in duties.

“We welcome the relaxation in excise duty from 16 per cent to 14 per cent.”

“However, for a manufacturer, as we are exposed to open competition with the various ASEAN countries, some relief on raw materials and intermediate goods would have made our industry competitive globally. Overall, I foresee an improvement in the macro economic condition of the country as this Union Budget proposes to boost agriculture, health and rural industry,” Shin said.

(CyberMedia News)