MAIT, the apex body representing India’s ICTe hardware, training and R&D services sectors, welcomed the thrust given in the Union Budget towards sustaining the national economic growth with a target of 9-9.25%+ and making it inclusive.
The industry body expressed satisfaction for the thrust given to infrastructure development, upliftment of the rural economy and significant outlay for promotion of the social sector, especially education, healthcare & employment generation.
Congratulating the Union Finance Minister, Shri Pranab Mukherjee, Mr Ashwini K Aggarwal, Executive Director, MAIT, said, “ The Honorable Union Finance Minister has presented an inclusive budget for the aam aadmi – and simple corrections for building the industrial impetus for the nation.”
Elaborating on the outcome, he added, “By defining a clear roadmap for the DTC and GST, the FM has set the stage for delivering a power fiscal ecosystem where the cascaded taxes are progressively ended, business is made simple for business and the industry is made competitive!”
“It is heartening that the Hon’ble Finance Minister has recognised the strong potential of IT to reboot key national projects”, added Mr Aggarwal,” The UIDAI implementation; National Knowledge Network and projects like Central Electronic Registry will improve the system efficiency as well as boost demand for IT in the country. Broadband connectivity to 2.5 lakh panchayats in 3 years will have a major e-inclusion impact on the rural India.”
“The increase of Minimum Alternate tax (18.5% from 18%) and the reduction of the surcharge for domestic companies(5% from 7.5%) are a typical FM trick – give with one hand and take with another – no surprise there”, mentioned Ashwini, “ and that is the best thing about the budget – no major surprise”.
Some of the other noteworthy outcomes of the Union Budget 2011-12 are:
No change in peak customs duty rate
Cut in import duties of raw material and full exemption from SAD for mobile phones to boost cellphone industry
Central excise duty rate unchanged at 10%
Rate of service tax continues at 10%
Clarification on the IT Software for non-rsp’able software imports
new scheme to be introduced for refund of service tax on lines of drawback of duties.
Concessional import duty structure of 5% CVD and nil SAD on prescribed parts for manufacture of DVD writers , combo drives and CD drives subject to actual user optionwill drive the manufacturing options but
An INCREASE in excise duty to 5% for microprocessors, DVD writers, CD writers, Floppy Disk Drives, Flash drives will increase the PC rates for the consumer. MORE IMPORTANT, this will actually make manufacturing more expensive than imports killing the domestic industry!
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“On the flip side – it is extremely disappointing that the bulk of the electronics manufacturing sector will continue to see an exposure to SAD - a controversial 4% duty that promotes imports at the cost of manufacture,”commented Mr Aggarwal, “ By missing on a long-standing demand of the industry – another year is lost for a breakthrough in India manufacturing!”