The Union Budget 2019 has focused on a Better India. The Finance Minister laid down various initiatives to position the country as a global hub for industry and academia. Whether it be 100% FDI for insurance intermediaries or Study in India program, the Government has laid down a clear roadmap for economic development.
Similarly, the government introduced multiple initiatives to strengthen the basic pillars essential to the development of the country. Starting from better infrastructure, connectivity, ease of living and ease of doing business to clean water, Budget 2019 laid emphasis on building a Sustainable India. Initiatives such as providing constant electricity at affordable rates or provide affordable housing through an additional deduction on the interest paid will benefit consumers across the country.
Further, as a fillip to India’s growing start-up and MSME sector, the Union Budget 2019 had multiple initiatives such as dedicated TV programs, launch of digital payments platform etc. and these initiatives will not only help this segment grow, but will also be a significant contributor to the country’s economy.
These are initiatives which clearly showcase the Government of India’s focus on a Better India.
From an industry point of view, there were multiple positive developments and we laud the Government of India’s vision to build a truly inclusive economy.
Focus on boosting consumer’s purchasing power
In an endeavor to allow the end consumer to have access to easy finances and improve their purchasing power, it was a welcomed move to provide necessary support to the non-banking finance companies in India, wherein the NBFC entities will continue to get funding from banks and mutual funds without being risk averse. However, reduction in GST rates for electronics were expected, such as GST reduction for TVs above 32 inches to 18% and bringing GST under 12% slab for efficient products like Air Conditioners and Refrigerators with a rating of 4 stars and above would have further propelled consumption and spending.
Reduction in the tax slab for electric vehicles from 12% to 5%, is a clear showcase of Government’s focus on encouraging sustainability. The allocation of Rs 10,000 crore for the FAME II policy and relaxing the duty on capital goods used for manufacturing of lithium ion cells is a welcome move that will provide the needed thrust for the adoption of EV’s in India. This will act as an added push to ensure green and sustainable solutions for the country and will also attract investments for local manufacturing. The additional tax benefit of Rs 1.5 lakh on the interest paid, for consumers wanting to purchase electric vehicles, will also boost demand of electric vehicles in the country.
Manufacturing continues to be a priority
Union Budget 2019 further re-instated the Government’s vision of creating an economy powered by manufacturing, by increasing basic customs duty (BCD) on indoor and outdoor unit of split system air conditioners from 10% to 20% and CCTV cameras and IP cameras from 15% to 20%. While the government has taken significant steps in improving manufacturing, we still look forward to exemption of BCD on open cells for televisions, which will help in reducing costs for the consumer and create a sustainable Phased Manufacturing Program. Hoping the Government to consider other appliances such as Air Conditioners under the Phase Manufacturing Program as well.
Budget 2019 adheres to a prudent fiscal roadmap. From, becoming a three trillion-dollar economy by FY2020 to push to attract foreign investment, the Budget presented a clear economic roadmap. This maiden budget of the Finance Minister is an ambitious one, aiming to fulfill the dreams of Modi 2.0 Government to take India’s economy to USD 5 billion by 2024.
(The author is Co-Chair, FICCI Electronic Manufacturing Committee and President & CEO – Panasonic India Pvt Ltd)