Budget 2015: It's Red-Carpet for ‘Make in India’

By Krishna Mukherjee

With reduction in custom duty on some components and a rise in excise duty on mobile devices, the message is loud and clear from the government -- 'start manufacturing in India'.

NEW DELHI: Finance Minister Arun Jaitley today presented a manufacturing-friendly budget with the reduction of customs duty on components and intermediaries and a rise in excise duty on mobile devices imported into India, giving boost to Prime Minister Narendra Modi’s pet project ‘Make in India’.

Jaitley proposed to reduce basic customs duty on certain inputs, raw materials, intermediates and components on 22 items. At the same time, increased excise duty on mobile devices imported into India to 12.5% from existing 6% in order to increase manufacturing in India.

During his speech, Jaitley said that the government will aim to make India a manufacturing hub with the 'Make in India' program.

Highlighting the importance of balancing between both 'Make in India' and 'Skilling India', the Economic Survey 2014-2015 on Friday pointed out that manufacturing productivity in India lags behind other nations. It said that all Indian states exhibit declining share of manufacturing in the state GDP.

Commenting on the budget, Amar Babu, President, MAIT, said: “From an IT perspective, the budget is a mixed bag with the inverted duty structure being finally addressed with the removal of SAD on all components. The removal of customs duty on components and concessional structure of 2% without CENVAT credit are positive steps to encourage tablet manufacturing in India.”

Aninda Moitra, President, Applied Materails - ESDM Sector said: “Budget 2015 is directionally positive for manufacturing, although specific focus on the ESDM sector would have been encouraging given the nascent nature of the ecosystem. The budget certainly shows the desire to make India investor friendly and is promising on the whole for the growth of our economy. To make India the manufacturing hub of the world, we now need to accelerate the execution of announced policies, make rapid progress along the conveyed directions and ensure focus on large-scale R&D in specific high value manufacturing areas like ESDM.”

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