Consumer Durable Industry Calls for 5-12% GST Cut: Budget 2024 Expectations
By: Admin July 22, 2024 Categories: GST Recent News
Unlocking Growth: Policy Expectations for India’s Consumer Durables Sector in Union Budget 2024
As India anticipates the Union Budget 2024, stakeholders in the consumer durables sector are voicing critical policy expectations aimed at fostering growth, enhancing competitiveness, and bolstering domestic manufacturing. This sector, pivotal to India’s economy as it eyes the global stage, awaits strategic interventions that could redefine its trajectory.
GST Reduction: Empowering Affordability and Access
A key demand from industry leaders is a GST cut of 5% to 12% on both entry-level and luxury appliances. Such a move is envisioned to make appliances more affordable across income brackets, thereby stimulating demand and consumption. The reduction is particularly significant for air conditioners (ACs), which are increasingly becoming a necessity in the face of rising temperatures, exceeding 50°C in several cities. Lower GST rates could potentially enhance the adoption of energy-efficient appliances, aligning with global environmental goals.
Promoting Local Manufacturing: Tax Incentives and PLI
To fortify local manufacturing capabilities and generate employment, there’s a unified call for tax reductions on raw materials, components, and machinery upgrades. The continuation of schemes like the Production-Linked Incentive (PLI) and the Made in India initiative remains crucial. These measures not only aim to reduce production costs but also encourage technological innovation towards energy-efficient products, essential for sustainability.
Corporate Tax and Fiscal Incentives
CEOs and business heads advocate maintaining the 15% corporate tax rate for new manufacturing ventures to attract investments, both domestic and international. Additionally, proposals to revise income tax slabs could potentially boost disposable income, thereby stimulating consumer spending across various sectors, including consumer durables.
Technological Advancements: Automation and Innovation
Automation is highlighted as pivotal for enhancing cost efficiency and competitiveness in the business environment. There is a strong emphasis on fostering industry-academia partnerships and skill development initiatives to upskill the workforce, essential for driving technological innovation and meeting evolving market demands.
Sustainability and Regulatory Streamlining
The sector underscores the importance of regulatory simplification to reduce transaction costs and improve ease of doing business. Moreover, there’s a plea for tax incentives that promote sustainable practices, positioning sustainability not only as a regulatory requirement but also as a competitive advantage in the global marketplace.
Challenges in Electronics Manufacturing
Despite contributing significantly to the economy, the TV manufacturing sector faces challenges, particularly in reducing dependence on imports for critical components like semiconductors and display fabs. Industry leaders stress the urgent need for government support to expedite semiconductor manufacturing projects and develop domestic capabilities for displays. This strategic move would stabilize supply chains, mitigate price volatility, and enhance the overall electronics manufacturing ecosystem in India.
Future Outlook: Transformative Potential of Budget 2024
Looking ahead, industry leaders express optimism regarding the transformative potential of Union Budget 2024 for the consumer durables sector. They anticipate policies that support research and development, enhance infrastructure, and drive sustainable growth. These measures are poised not only to consolidate India’s position as a leading global economy but also to harness the demographic dividend of its large young population.
Conclusion
As India prepares to present its Union Budget 2024, the consumer durables sector stands at a pivotal juncture. Policy interventions focusing on GST reduction, incentives for local manufacturing, technological innovation, and sustainability could redefine the sector’s growth trajectory. The alignment of these measures with global environmental goals and economic imperatives will be crucial in shaping a resilient and competitive consumer durables industry in India.
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