Did Budget 2016 help India's Electronic Manufacturing?

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Rs. 500 Crores for Standup India
Government has shown great intent in promoting the start-up ecosystem in India. With Government's announcement to promote women entrepreneurship, and entrepreneurship in the SC/ST category, we will have an immense role to play along with MSME in making this initiative successful. We are honored with government's trust on associations like IESA and look forward to work in tandem to realize this socially important goal.

Investment exists in start-ups in two years qualifies as Long Term Capital Gains and this encourages angel/venture capital infusion. Further, the simplification of norms for forming a company along with 3 year tax holiday will spur entrepreneurs to establish start-ups. This reflects the commitment PM Modi made during the Start-up India Action Plan on Jan 16th. We are happy with Government’s initiative to boost local manufacturing and the start-up ecosystem in India, with their decision to allow rebates to the SMEs and also 100% deduction of profits to the start-ups.

With Government’s announcement to promote women entrepreneurship and entrepreneurship in the SC/ST category with a propose budget of Rs. 500 Crores, we will have a critical role to play along with MSME in making this initiative successful. We are honored with Government’s trust on associations such as ours. We see this initiative as a great way to explore India Innovation Fun, IESA will work in tandem to realize this socially important goal.

Rs. 1700 Crores on Skill Development
Government’s focus in promoting entrepreneurial skills is the right step taken towards the growth of the ecosystem. The Investments made by Govt. to build skilled workforce will help increase employment in the country.

This initiative will give impetus to implementation of national programmes like Digital India, Make in India, Smart Cities as skilled workforce is at the core of the programs’ success, overall accelerating India’s economic development.

Smart Transportation Initiative
Glad to see focus on smart transportation from the government. It’s a known fact that the nation struggles with transportation related issues and we are pleased to see focus on implementing smart transportation through startup involvement.

Excise Duty Amendment
Exemption of BCD and SAD for ATMP for semiconductor wafer fabrication / LCD fabrication is a very well planned move and will certainly give a boost to local manufacturing especially to SMEs. Similar exemption extended to parts and components, sub parts for manufacturing of charger, adaptors, mobile phones, routers, modems, set- top boxes etc., will significantly go a long way in encouraging local production.

Imposition of BCD on finished products like telecom equipment etc., is a very well thought out to enhance domestic manufacturing and reducing import dependence. Reduction of BCD on specific capital goods for manufacturing of various fuses is a boost to component manufacturing and enriching the supply chain.

Make in India
Imports of assembled sub-systems like charger/adapter, battery and wired headsets/speakers for manufacture of mobile phone will cost 16.5% more due to withdrawal of Basic Customs Duty and Special Additional Duty.

On the other hand, inputs, parts and components, subparts for manufacturing these and other electronics sub-systems have been reduced to 0%. Further, imports of populated Printed Circuit Boards will cost 2-4% more. Both these reflect a strong commitment to promote local value additions in electronics.

(The article has been authored by MN Vidyashankar and Vinay Shenoy from the India Electronics and Semiconductor Association)

Image credit: Indiatimes
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