Budget 2022 expectations: What’s the industry wish list?

Union Budget 2022 is around the corner and all eyes are on Finance Minister Nirmala Sitharaman and February 1^st, 2022. The Tech Panda sought to know what the industry expects from the upcoming budget.

Focus on Atmanirbhar Bharat in IT

Sandeep Lodha, Co-founder at Netweb Technologies thinks there should be encouragement for Made in India.

“Today, the government has quite a lot of proactive policies for server manufacturing, like PLI and other initiatives. Our take is that the budget should focus on a few important things for demand generation. We need to see how the local buying of made in India products is encouraged.

“The government should fund a scheme for tech adoption, and government purchases of high-end IT products should be encouraged/prioritised to help create more demand. Data Centre Operators should be incentivised to use more “Made in India” products. This will help the country to achieve the PMO’s objective of achieving Atamnirbhar Bharat.

Data Centre Operators should be incentivised to use more “Made in India” products. This will help the country to achieve the PMO’s objective of achieving Atamnirbhar Bharat

“Local server technology development will help to bring cutting-edge technology to the country while also addressing the nation’s security concerns.

“Another thing I am looking forward to is the R&D side. There has to be special incentive for companies investing in R&D, there must be government incentivised and facilitated collaborations between the companies and premium education and R&D facilities. This will be a major game changer as the R&D and education systems will become more aligned with the real world of commercially valid products, and the industry will benefit from innovation and local enhancement of technology to create global competence.”

Make in India Initiatives in Retail & Electronics

Pallavi Singh, Vice President, Super Plastronics PVT LTD (SPPL), India brand licensee of Westinghouse TV, also seeks promotion of Make in India initiatives like building a tech hub, enhancing semiconductor manufacturing, or efforts to be put under National Policy on Electronics (NPE)

“Given the current semiconductor shortage in the world, our government should aid the potential sector and afford schemes under the NPE. Those aiming to manufacture in India and contributing towards the growth of the economy can be provided aid in the form of subsidies. The NPE can also help in providing a shoulder for our country and reducing its dependence on foreign nations if it were to correctly subsidise those who are willing to bring the relevant infrastructure, especially with respect to semiconductor/chipset manufacturing, to India.

Those aiming to manufacture in India and contributing towards the growth of the economy can be provided aid in the form of subsidies

“This, ideally, should also be backed by tax subsiding schemes so as to reduce the burden on an entity since the quantum of investment required is huge. The NPE can also be expanded to include and aid those already manufacturing consumer electronics in India as opposed to importing them.

“With the pandemic causing a major hit to the retail sector, the government should introduce schemes and rebates to help rebuild this sector. GST on the same should also be curbed to provide relief and relaxation from the current inflated economy and increase in the price of raw materials. It has become a tedious task to run brick and mortar stores, and for those retailing particularly through them, even more so.”

Slash GST Prices on Consumer Electronics

Singh also seeks a slash on GST prices on TV.

“With the budget of 2022-23, we hope and sincerely urge that the government reduce GST on all consumer electronics to reflect those available on raw materials to reduce the disparity, especially since in today’s day and age, consumer electronics are tagged as necessities by all categories of consumers in India.

With the budget of 2022-23, we hope and sincerely urge that the government reduce GST on all consumer electronics to reflect those available on raw materials to reduce the disparity, especially since in today’s day and age, consumer electronics are tagged as necessities by all categories of consumers in India

“With the current rate of 18% on televisions up to 32 inches only, there is a vast range of televisions that comes under the ambit of the 28% rate. A reduction in the rate to 18% even in televisions up to 43 inches will bring a huge relief since the majority of the consumers in India fall under the 32 to 43 range.”

Slash Raw Material Prices / Waiver Customs on Imported Inputs to Make Components

Another ask is reduction in raw material prices or waiver of customs duty on imported inputs to make components.

“Since there are no open cell manufacturers in India and the viability of setting up a plant is far from certain, the Indian government should take this into consideration and reduce the custom duty on open cells to 0% from the current 5%.

Since there are no open cell manufacturers in India and the viability of setting up a plant is far from certain, the Indian government should take this into consideration and reduce the custom duty on open cells to 0% from the current 5%

“Had the same been present in India with imports providing competition or driving up open cell prices, it would still be reasonable to levy this duty. With the absence of the product because of the sheer lack of a facility, Indian manufacturers of televisions should not be made to pay for it. This will help to promote domestic manufacturing while also keeping our prices competitive should we aim to become an exporting country for consumer electronics.”

Boost Indian Manufacturing & Logistics

Avneet Singh Marwah, CEO at SPPL, exclusive brand licensee of Blaupunkt in India, seeks emphasis on boosting Indian manufacturing and logistics in the consumer durables and appliance sector.

“As we are going through another wave, this is an indication of how important Atmanirbhar Bharat is. To boost Indian manufacturing and MSMEs, we need a stable GST tax slab. No product should be above the 18% slab, and they must now encourage consumerism in order to improve market sentiment.

To boost Indian manufacturing and MSMEs, we need a stable GST tax slab. No product should be above the 18% slab, and they must now encourage consumerism in order to improve market sentiment

“By doing this, India could become the world’s third-largest market for television. The market size could grow by 15% each year, reaching 16 million units. We urge the government to not change any customs duties for the time being, as the industry is moving towards stable conditions.

“We need to congratulate GOI on introducing the US$10 billion PLA scheme for display panels and semiconductor chips. We request the FM to have timelines for these projects. It is a pathbreaking move for the electronics sector.

Lower Tax Rate on Consumer Electronics

Marwah also seeks improvement in the cargo sector.

“The other most important sector where the government needs to intervene to take strict measures and review how they are misleading is the cargo sector. We’ve seen a 10x increase in sea freight in the last few years, and along with that timeline, it’s increased 2x. There is a big syndicate in this sector, which is causing this delay and causing a huge loss to the economy as these delays are being managed at Indian sea ports as well.

The government should consider a lower tax rate on consumer electronics; this will encourage consumers to buy higher ASP products

“The government should consider a lower tax rate on consumer electronics; this will encourage consumers to buy higher ASP products. This will also help in digital India, as consumers will opt for more tech products.”

Policy for the Unorganised Sector

Neha Indoria, co-founder, Boingg!, D2C children’s furniture brand, seeks policy change that levels the playing field for the largely unorganised sector in India.

We expect policies that level the playing field for the largely unorganised sector in India and also help augment the export market which at this point can be capitalised on given the global tendency to shift away from the Chinese market

“The expectation from the budget is that it would augment a push towards the organised sector of India’s furniture market, especially the kid’s furniture market (online and offline). We expect policies that level the playing field for the largely unorganised sector in India and also help augment the export market which at this point can be capitalised on given the global tendency to shift away from the Chinese market.

More Teeth & Muscle for Digital India

Piyush Gupta, President of Kestone, a data driven integrated sales & marketing company, seeks tax cuts, regulation, and boost for the digital India initiative.

“Martech is among the few segments that witnessed a surge through 2021 as the shift towards virtual picked pace and is likely to stay at that level for some time now. Even government and global multi-lateral organizations embraced this change fairly early and quickly. What is interesting and heartening has been that this push towards digitization and virtualization is no longer concentrated in the larger cities’ choice but has spread to Tier 2/3 cities and beyond.

What will be of real help to not just our segment but the broader economy is to bring down direct taxes, make the regulatory environment, even more, simpler and rationalized, easier for platforms looking to grow globally, change the current moribund corporate lending sentiment by addressing the pain points responsible for it, increase the current pace of digital infrastructure investments and finally add more teeth and muscle to the “Digital India” initiative

“Digital India which is one of this government’s pet themes has gotten a huge push. We also have an ambitious target of a US$1 trillion digital economy by 2025. In this context, what will be of real help to not just our segment but the broader economy is to bring down direct taxes, make the regulatory environment, even more, simpler and rationalized, easier for platforms looking to grow globally, change the current moribund corporate lending sentiment by addressing the pain points responsible for it, increase the current pace of digital infrastructure investments and finally add more teeth and muscle to the “Digital India” initiative.

“We are not seeking direct help beyond this larger macro support and easing the road ahead for players like us who want to grow globally. Of course, as a citizen, would like to have inflation reined in, fuel and gas prices to be stable, consumer confidence to grow and central investment in infrastructure to continue”.