The Union Budget 2008-09 was essentially a growth driven budget with good signals for the overall industry. Government had stood by its plans as discussed in the budget impacting overall growth in Industry. The global recession had no major impact on the Indian economy because of the timely and corrective actions by the policy makers of India. The continuous duty reduction has helped in price reduction across the product category and such supportive measures have helped the Consumer Durable industry in achieving the high growth rate. We are sure that the pace of reforms will continue as impressively as in the past.
India is becoming an emerging country with its fast economic growth. The internal consumption of all the categories of products is growing day by day. Besides, India is on the path of becoming a Global choice as a manufacturing hub for exports. The government needs to look into the improvement of infrastructure including ports, Express road network, and communication.
India can compete with any other country in the sectors of its capability and development. The country is in the path of becoming a global player as a manufacturing hub for a huge amount of export to Europe, US and Africa. To achieve this goal, the Government needs to focus on the export industry and introduce special schemes that are required to bring investments and generate employment in that sector.
To prepare a common platform for manufacturing units, the Government must look for implementation of GST as promised in the previous budget. The Tax boundaries need to be rationalised and ‘Sales Tax’ by the states should be communised without any demand from the states resulting in additional tax burden.
India has a great potential for the IT, Telecom and Electronics sector. To have a better edge over international markets, development of components is extremely essential. Government should support the industries and launch special schemes for in-house component development and R&D.
The Government should subsidise basic infrastructure requirements such as water, electricity and steel for construction and also remove inverted duties on the raw material and components in order to make competitive products available at lesser cost for the common man.
The Government must look at the industry as a growth driver and initiate steps to help in the development. To make this industry grow and contribute to the whole economy, the following areas need attention during this budget:
- Implementation of GST and rationalise taxation on all India basis
- Removal of Fringe Benefit Tax (FBT) and “Minimum Alternate Tax” (MAT), both of which result in high operational cost and make the final product costly.
- The issue of high interest rates leading to pressure on borrowing increasing overheads.
- Reduction of high corporate tax of 30 per cent, which result in increase of overheads making the product uncompetitive in the domestic market.
Views expressed are personal.
