Budget 2021 offers an opportunity to implement structural reforms in the manufacturing sector to contribute to 25% of India’s GDP by 2025. The service sector has been a significant factor in propelling India’s economy. The manufacturing sector is yet to reap its fruits, despite its higher multiplier effect on employment and growth. Let’s see what the tech and gadgets industry have to say about Budget 2021.
Mr. Rajeev Singh, Managing Director of BenQ India, said, “A very significant budget as India is coming out fast from effects of COVID 19, Government has given the strong emphasis on spending on Infrastructure along with the big push for Atmanirbhar Bharat. Alongside, there is no change in the direct taxes largely which were moderated for companies last time. This will mean more money in the system and will act positively towards faster growth of the economy. The government has also given an additional push to education and skill development segment in the budget which will result in the extensive use of technology which in turn will give a boost to the virtual classroom and Blended and Hybrid Learning.”
Vinu Cheriyan, CFO & Director Operation, Sennheiser India, said, “For 2021-2022 Union Budget, the government has made some notable announcements that are aimed towards the overall development on the ease of doing business. The central government plans to create manufacturing global champions via PLI scheme in 13 sectors will help the manufacturing sector to double its growth rate, which will end up creating huge job opportunities across. Additionally, the Government of India has chosen a big infrastructure push by allocating budgets to construct national highways which will improve the connectivity in tier 2 and tier 3 cities. This will further help in ensuring seamless movements and deliveries across India, thus strengthening the overall development of industry and commerce, further giving a push to the audio accessories industry in India . We appreciate the government’s initiatives and look forward to a fruitful year ahead.”
The Finance Minister, Nirmala Sitharaman said that the inclusion of one-person companies (OPCs) will be stimulated by allowing such companies “to grow without restriction on paid-up capital and turnover, allowing conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days, and allow also non-resident Indians to incorporate OPCs in India”.
Mr. Niraj Hutheesing, Founder and Managing Director of Cygnet Infotech says, “We welcome the measures announced by the government of India in the Union Budget 2021. Significant capital expenditure in infrastructure and health care sectors will be a big asset for India. Promotion of digitization at large, and digital transactions particularly, is another positive aspect of the budget. There has been the political will to take a big deficit for the next year. Simplifying the tax regime is another important aspect of this Budget. To ease compliance, the Finance Minister has increased the tax audit limit from ₹5 crore to ₹10 crores for the companies that conduct most of their business through digital modes. Additionally, the government is also planning to take steps to reduce inverted duty structures in GST and has proposed to review over 400 old exemptions in indirect taxes and will begin extensive consultation from October 2021. The budget also provided impetus on one of the most hard-pressing issues, namely tax evasion cases. The use of digital technologies such as automation solutions and data analytics tools can help in removing anomalies in the GST tax infrastructure and make it transparent to a great extent. All the measures announced today will further enable companies such as Cygnet Infotech to develop technology solutions for businesses to help them adhere to the taxation norms”
Vikas Garg, Chief Financial Officer at Paytm said, “The Finance Minister has presented a balanced budget that is aimed at maximum growth of all sectors in the coming year. The Rs.1500 crore proposed scheme to incentivize digital payments is a welcome move that will accelerate the growth of cashless transactions in our country. During the pandemic, digital payments emerged as one of the key enablers of empowerment at the grassroots and brought millions of people under the fold of the formal economy. Government’s continued emphasis on increasing investment in Infrastructure, Insurance and digital payments will ensure financial inclusion of the masses.”
The Finance Minister, Mrs. Nirmala Sitharaman while presenting the union budget stated that the government aims to spend ₹1.97 lakh crore on various PLI schemes over the next 5 years, beginning from this fiscal year. This will be an extension to the ₹40,951 crores declared for the PLI for electronic manufacturing schemes. The production-associated incentive scheme (PLI) for large-scale electronics manufacturing provides incentives to producers that shall play a significant role in making India a hub for manufacturing and exports. The scheme shall promote local companies to establish or extend manufacturing units in India.
Mr. Rahul Agarwal, CEO & Managing Director, Lenovo India, said, “The six pillars of the Union Budget 2021 add enormous value to the economic relief post the pandemic issues and paint a futuristic picture for the new year. It has managed to address some of the key issues around Atmanirbhar Bharat, education and Digital India that presents significant business opportunities for global corporates such as Lenovo. With the PLI scheme announced along with the increased focus on ‘Make in India’ in this budget, we are confident that it will encourage local manufacturing, and further bolster the local PC market. Lenovo will also support the government in enriching India’s economy, by boosting digital infrastructure in the field of education and additional focus on promoting inclusive development. The national education policy also creates an opportunity to build the Indian EdTech ecosystem to make it best across the globe for research & innovation, and empowers the citizens to scale up their skills.”
The Union Budget 2021 can help revive productivity in the manufacturing sector that suffered the most due to the COVID-19 pandemic. Reforms like simplification and automation of GST, subsidised or free immunisation against COVID-19, access to IT/ITES at affordable costs, availability of low-cost long-term loans, and immediate short-term liquidity can enhance capacity utilization and increase the manufacturing capabilities.
Mr. Rajesh Uttamchandani, Director, Syska Group said, “Finance Minister Nirmala Sitharaman stated that for a 5-trillion-dollar economy, our manufacturing sector has to grow in double digits on a sustained basis. We welcome the measures exercised by the honorable Prime Minister Shri Modi Ji and his government in the Union Budget towards boosting electronic manufacturing in the country. The government led by Modi Ji has pledged an infusion of Rs 1.97 lakh crore on various PLI schemes over the next 5 years, starting this fiscal. This is in addition to the Rs 40,951 crore towards the PLI scheme to help expand and boost exports. Today, India’s manufacturing industry has tremendous potential to place the country on the global manufacturing map, simultaneously boosting several employment opportunities for India’s youth. Our manufacturing companies need to become an integral part of global supply chains. With a budget of Rs 15,700 crore, which is more than two times that of the previous year, this will help strengthen the MSME sector in terms of product development, technology adoption, strengthening of infrastructure, and more. As a company, Syska has always been aligned with the vision of Atmanirbhar Bharat promoting sustainability through our products and creating new job opportunities. The budget has a positive, expansionary approach towards the manufacturing sector, which is reflected through the incentives and strengthening of the PLI schemes provided by the government.”
The Union Budget 2021 ensures the long-term competitiveness of the manufacturing sector. This may encourage the manufacturers to implement competitive practices to achieve long-term growth. The key areas promoted by the budget are as follows:
- Domestic R&D capabilities: To realise ‘Atma Nirbhar Bharat’, we need to reduce the dependency on imported raw material and finished goods. The Budget promotes the companies to establish indigenous R&D facilities by providing tax incentives on capital expenditure and R&D.
- Ease of Doing Business: Simplified tax structure, land and labor laws, and robust commercial dispute resolution mechanism will promote ease of doing business for manufacturing companies.
- Digitisation: The Budget promotes companies to increase the adoption and implementation of smart and sustainable manufacturing practices.
Varun Babbar, Managing Director, Qlik India said, “The Union Budget 2021 is truly a balanced and reformative framework that looks forward to bolstering an economy towards faster recovery and growth which was otherwise ravaged by the pandemic. We appreciate the government’s vision of an “Atma-Nirbhar Bharat” by providing economic assistance through tax reliefs, incentives and new policies. Continued support in areas like education and technology as well as providing breathing room for startups through initiatives like providing tax relief for one more year will help to kickstart a resilient economy for all industries. The government’s allocation of Rs. 1500 crores towards promoting digital modes of payment will also boost India’s digital payment infrastructure. Aligning with our focus to provide active intelligence and real-time analytics, the government’s allocation for infusion of Rs. 20,000 crores will help to reform the country’s surge in digital payments for the post-pandemic future”.
Mr. Kishan Jain, Director, Goldmedal Electricals said, “The Union Budget 2021 has provided massive opportunities for companies looking to set up manufacturing facilities in the country. Given our current economic situation across the globe caused by the pandemic, the Finance Minister’s decision to infuse INR 1.97 lakh crore towards various PLI schemes is laudable in addition to the Rs 40,951 crore towards the PLI scheme to help expand and boost exports. As correctly stated by FM Nirmala Sitharaman, our manufacturing companies need to become an integral part of the global supply chain. Further, the provision of INR15,700 cr towards the MSME sector will provide a further fillip to the Government’s flagship Make in India initiative. As a company, Goldmedal Electricals has always been at the forefront of introducing innovative and sustainable solutions that make our planet not only smarter but also sustainable for generations to come and support the government’s vision of Atmanirbhar Bharat.”
The Union Budget 2021 allocates ₹ 3,768 crores for India to have its first-ever digital census. The digital census will require an unprecedented use of portable gadgets like smartphones and laptops. This step shall boost the demands in the gadget manufacturing industry. For even greater domestic value addition, the government is withdrawing a few exemptions on part of chargers and sub-parts of mobile phones. According to the Finance Minister, some parts of mobile phones are expected to move from nil rate to a moderate 2.5%. Moreover, the integration of one thousand more Mandis with the electronic national market can induce transparency and speed in the marketing and dealing of electronic parts.
Hari Om Rai, Chairman & Manging Director, Lava International Limited, said, “The announcement of developing financial institutions can boost the manufacturing industry. Now the companies can stand together with the government to make the country progress from poverty to wealth in the next three decades.”
The Union Budget 2021 can be considered a silver lining for the manufacturing industry in the COVID-19 era. With emphasising on Digitisation and Ease of Doing Business, the Union Budget 2021 is expected to prove pivotal in making India a manufacturing hub in the future.
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