Budget 2020: Make In India Has Started Paying Dividends, Says FM

SUMMARY

FM announces new scheme for promoting domestic manufacturing of electronics

The budget proposed a new scheme to incentivise electronics manufacturing in India

Launched in 2014, Make In India has been an ongoing effort of the Narendra Modi govt

Announcing the Union Budget 2020, India’s finance minister Nirmala Sitharaman said that the policy of ‘Make in India’ has started reaping dividends. She also proposed a new scheme for promoting domestic electronics manufacturing and extension of corporate rate cut to domestic power generation companies.

“Under Make in India initiative, well laid out customs duty rates were pre-announced for items like mobile phones, electric vehicles, and their components. This has ensured a gradual increase in domestic value addition capacity in India,” said Sitharaman.

For this year’s budget allocations, she said that the customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived Phased Manufacturing Plans. The minister further proposed to promote the manufacturing of electronics by setting up a new scheme that would incentivise mobile manufacturing, electronic equipment, and semiconductor packaging. The details of this scheme are yet to be announced.

Further, to attract investment in India’s power sector, the finance minister proposed to extend the concessional corporate tax rate of 15% to new domestic companies engaged in the generation of electricity.

Modi Government’s Make In India Efforts

India has pursued a two-pronged strategy of import substitution and export encouragement, through the Make in India campaign coupled with the Digital India campaign, along with the Startup India and the Skill India campaigns.

India’s electronics market is one of the largest in the world in terms of consumption and is predicted to grow to approximately $400 Bn by 2020 from $69.6 Bn in 2012. While in 2013-14, 65% of the demand for electronic products was met through imports, the electronics hardware manufacturing industry in India is projected to produce electronic goods worth $104 Bn by 2020 from $32.462 Bn in 2013–14.

Last year in July, Indian minister of communications and minister of law and justice, Ravi Shankar Prasad had also said that the government is aiming to make India a major export hub of electronics manufacturing. According to Prasad, India is the second biggest manufacturer of smartphones in the world. India has 282 mobile factories in 2019 as compared to just two factories in 2014, he added.

Click Here To Read Inc42’s Live Coverage Of Union Budget 2020.