Expectations of manufacturing sector from Budget 2017

Manufacturing sector has been plagued by various issues. The major ones being weak consumer demand, decline in exports, negative growth in capital goods sector and infrastructure spending. In order that the economy is put on a growth trajectory, it is necessary that there is a demand push in the form of increased infrastructure spending, which in turn would result in generation of demand to a great extent.

A day before the presentation of the Union Budget in the Parliament, Kuldeep Malik, who heads the India sales division of MediaTek, talks about the probable changes that the Budget 2017 will bring to the manufacturing industry in India. 

An industry leader in manufacturing semi-conductors/chipsets for various devices, Kuldeep Malik, says, "We believe that the 'Make in India' initiative will see a great positive impact if the government decides to increase the scope of existing localisation clause of import duties on mobiles and tablets. Further, due to this, the current manufacturing ecosystem will see a shift in adoption from semi knock-down (SKD) to complete knock-down (CKD). This will in turn lead to an increased focus towards the development of local components ecosystem."

He adds, "Similarly, the development of industrial and mechanical design activities will be involved with an increase in design activities taking place within India. Software and hardware localisation will bring in key developments towards local R&D activities and we do foresee the jobs market to experience a boost. Big Chinese players like Oppo, Vivo, Gionee, and iTel, who have already entered the Indian market, will gradually shift their R&D focus to India in order to tap into the huge pool of resources available within the country."

As per Nielsen's report, the Indian manufacturing sector has the potential to reach USD 1 trillion by 2025 and can contribute approximately 20-30 per cent to India's GDP from the current contribution of 15-16 per cent.