Budget
2018: Let’s cast
our minds back to the year 2015 when PM Narendra
Modi first announced the government’s ‘Make
in India’ initiative. The intention was
to project India as an attractive destination for manufacturers, indigenous and
foreign, to invest and build in India. With the world’s second-largest
population at 1.3 billion and rising, India represents a profitable destination
for any manufacturer looking to expand a business.
Since then, progress on this front has been
above average and several policies and regulations have made it simpler for
manufacturers to flourish in the nation. Last year’s Union Budget also put
forth several great policies that aided the sector, and the expectation is that
Budget 2018-19 will be similarly progressive to add further impetus to this
movement. Recent reports stated that in November 2017 the Index of Industrial
Production (IIP) hit a 17-month high of 8.4% and the objective should be to
continue this growth rate.
All eyes are on Budget 2018.
Here is a quick recap of some of the key highlights from last year’s budget
which helped the manufacturing sector:Reduction in the income tax rates for MSME companies with turnover up
to Rs. 50 croresDisbanding the Foreign Investment Promotion Board (FIPB) by
2018.Extending MAT credit to 15
years from the previously restrictive 10 years.
Launching a Phased Manufacturing Programme (PMP) to encourage domestic
manufacturing of electronic components and smartphones.Raising the FDI limit
within the defense sector to 51% to encourage greater stakes than the previous
49% and build ‘strategic partnerships’ to manufacture submarines, fighter jets,
helicopters and armored vehicles
Setting up 4 Centers of Excellence (CoE) for
textile machinery, machine tools, welding technology and smart pumps.While all these announcements were
encouraging for the sector and have had a positive transformational impact,
industry watchers expect that the government needs to take it up further in
Budget 2018 and get deeper into policymaking so that it benefits the
manufacturing domain in the country. The importance of the Union Budget 2018-19
for the manufacturing sector thus has a lot riding on it.
Source: DNA India, India Thursday, 25 January 2018