Manufacturers’ AssociationforInformation Technology (MAIT), India’s apex body representing IT manufacturers, has welcomed the new duty provisions recently announced in the Union Budget 2016 to boost manufacturing of Customer Premise Equipment (CPE) in India. The association has thanked the government on behalf of the Indian IT industry and has come out in support of the overall and industry-specific provisions announced by Finance Minister Arun Jaitley on February 29, 2016. They have also expressed hope that preferential duty tariffs will be extended to Notebook PCs and Desktop PCs in the near future, as well as populated Printed Circuit Boards (PCBs) to unleash the full impact of ‘Make in India.
Union Budget 2016-17 Highlights: MAIT Perspective
Integrated approach to build connectivity through Road, Rail, Air and Waterways to improve logistics movement and management will lower cost of doing business
Push for simplification of G2B processes and wider use of Technology in governance will help to create demand for
IT products and services
Measures and incentives outlined to develop India as a start-up hub; many more benefits announced for SMEs will open up many more employment opportunities
Duty Differential introduced for parts of Mobile phones, CPE, IP Surveillance products: Big boost for domestic assembly and manufacturing of these products
Strong intent for a qualitative improvement in all round business environment including demand generation, skill development and tax administration
Many measures taken to boost demand, skill development and ease of doing business
Ms Debjani Ghosh, President, MAIT said, “This budget, unlike any other, has not treated technology in isolation but integrated the effective use of technology across all the strategic imperatives in keeping with the intent of a Digital India. It has laid emphasis on governance reforms and ease of doing business, while highlighting the need for enhancing educational skills. However, we are disappointed with announcement of R&D incentives reducing because this move could be detrimental in building India as an innovation hub. I strongly urge the government to reconsider this move, as any restrictions on the R&D ecosystem are likely to decelerate innovation and restrain the ambitious Make in India and Digital India vision.”
Mr Nitin Kunkolienker, Vice President, MAIT added, “The Budget has many positives for the development of the country as a whole and to kick-start all-round economic activity. The change in duty structure will encourage manufacturing of consumer premise equipments like modems, routers, digital video recorders, set-top-boxes and IP cameras. We expect a billion US dollars worth of investment inflows for their local production; further, I expect the prices of these products to go down by 8% in the first year itself and by 10% over 18 months.”
Mr Anwar Shirpurwala, Executive Director, MAIT said, “Budget 2016 has met our demands partially and will help the Indian ICT industry move from assembly to the next level of manufacturing. However, certain products have been missed out, most notably laptops and notebooks and populated Printed Circuit Boards. In order to create an effective IT-ESDM manufacturing supply chain, it is very important to exclude populated PCBs from the purview of NIL rate of duty, that is, the levy of 12.5% CVD and 4% SAD, where such differential duty benefit is currently extended.” Mr Shirpurwala clarified further.
“BCD, CVD and SAD exemptions need to be made available judiciously to encourage domestic manufacture of CPE products, populated PCBs and PCs.” Mr Shirpurwala emphasised.