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Press Response: Union Budget 2019-20

Press Response: Union Budget 2019-20

ELCINA’s Initial Response to Union Budget 2019-20

The Union Budget announced  today has focused on development of infrastructure, promoting the real estate and affordable housing segment and some important financial reforms.  There is a further tightening of screws on the cash economy and focus on social causes such as promoting education for all, pension for small traders, piped water for all and electricity connection for all households by 2022.

To promote local manufacturing of electronic products, the Finance Minister has enhanced customs duty on Split ACs, CCTV Camera, IP Camera, DVR, NVR as well as their chargers.  This is a major boost for local manufacturing of these products.  This would really benefit domestic manufacturing if the industry increases value addition and components as well as sub-assemblies of these products are manufactured in the country.

ELCINA supports the withdrawal of List 20 from Srl. 427 of Customs Notification 50/2017 thus imposing import duty on some large volume components such as Ferrites, Switches, Connectors, microphones, relays and more. This will give a fillip to the electromechanical segment of components.

Import duties have also been enhanced on some auto electronics parts and signaling equipment which will give additional protection to this industry segment.

Relief under Section 35AD of Income Tax Act to manufacturers of Solar Photovoltaic Cells, Lithium Ion Batteries, Servers, Laptops and Solar Charging Equipment for EVs is a important positive step. However the Electronics sector had requested that the entire sector be covered under 35AD which has not been done. FM must consider this request and atleast provide this benefit to all ICT products and their inputs covered under ITA-1 and allowed for import at zero duty.

Reduction of GST and import duty on inputs for EV’s is a positive step and will give much needed boost to this product which is the future of mobility. Accompanied with FAME 2, the EV sector should see the required positive movement the industry has been waiting for.

The Union Budget will provide a boost to electronics manufacturing and combined with effective implementation of National Policy on Electronics 2.0 ELCINA expects an improvement in the industries fortunes.

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