The interim Budget presented recently has some positive measures for the construction equipment sector, with the highlight being the two per cent excise duty reduction on capital goods. Industry captains react.
We as part of the construction equipment industry, are happy with the cuts announced by the Finance Minister. This will certainly help this important industry to build infrastructure, which has been down by over 30 per cent over the last couple of years. However, I feel that, given the importance of the industry, the capacities already created and its ability to generate more employment and entrepreneurs, excise duty reduction should have been higher, to the tune of four per cent.
Amit Gossain, President, iCEMA
The Vote on Account is, of course, a temporary intervention but I am glad that problems relating to the manufacturing sector have got some attention, with steps taken to stimulate demand for automobiles and capital goods. It is also heartening that the fiscal deficit and burgeoning current account deficit have been reined into some extent. A lot more needs to be done to bring the economy firmly back onto the growth path but that will be the preserve of the new government and a full Budget.
Anirudh Bhuwalka, MD & CEO, AMW Motors
Our manufacturing sector has been facing many challenges and its growth has been stagnant. It is heartening to see the emphasis this vote on account puts on the criticality of manufacturing for the Indian economy. If the manufacturing sector has to contribute 25 per cent to India´s GDP, then we need to re-engineer our processes through technology enabled innovation. Manufacturing is now operating in an experience economy and customer buying behaviour is fundamentally changing. Beyond product attributes, aesthetic and economics, customers make their buying decisions in a social and emotional context beyond technology. The manufacturing sector will need special attention from the government to become globally competitive.´
Dr Chandan Chowdhury, Managing Director-India, Dassault Systemes
´The Finance Minister has made some right pushes in the infrastructure and equipment manufacturer segment. The government´s plan to allocate Rs 1,81,134 crore to the infrastructure sector, comprising power, coal, roads, civil aviation, ports and railways is very encouraging; and the plan outlay for the coal ministry has been raised 15 per cent which is a good sign for the mining sector. I believe this is one of the high points of the Budget since mining companies will look at venturing into newer projects.
The government´s push for PPPs will help in mobilising the massive investment that is required for infrastructure development. This will also encourage more and more projects to be developed on PPP model. Government´s decision to facilitate Infrastructure Debt Funds to provide take-out finance for infrastructure projects is a good move towards easing the pressure off the banking sector. We were expecting the GST model to be given a nod but this did not happen since the government is still in consultation with different states. This would have been a huge boost for equipment manufacturers as it will reduce taxes on sales of equipment between states. Overall, the Budget resonates well with the verticals we cater to and this year, I hope to see positive developments in the equipment manufacturing industry.´
AM Muralidharan, President, Volvo Construction Equipment.