Budget favorable to industry
No doubt that the Budget has been designed for the overall growth of the economy. Although the industrial economy is expected to grow at 8 plus percent this year, $1 trillion is an ambitious goal.
The policies to invest in sectors such as Infrastructure, Power, Agriculture, and Transport are all welcoming signs. Since the onset of Covid, the new norm has been to use digital platforms for connecting and networking. Hence, the virtual business development opportunities are promising.
Some of the gaps to be addressed are training and retraining in skill development, and the adoption of automation in the manufacturing ecosystems that can scale up production levels.
Intensive training on the quality management systems, willingness to consistently spend on R&D, and the use of cutting-edge technologies in manufacturing are the need of the hour. The industry and academia tie-ups, especially for MSMEs, and the availability of certified raw materials without minimum order quantities are also to be put in place.
There will be a boost to the export of Defence equipment and the development of the Health sector, given the global goodwill generated due to the export of Covid vaccines. Industries including Machine Tools, Industrial Machinery, Pharmaceutical equipment, Aerospace and Defence, and Agri Machinery are slated to grow fast.
Innovation and R&D are important
We need to change our mindset and realize how important innovation and R&D are for our growth. While we are good at ‘Juggad’ solutions to cater to the local demands, we must now invest in R&D for us to move upwards in the value chain. Associations and institutes involved with R&D should conduct webinars to raise awareness on the same.
So far so good
I believe that the Budget will have a positive impact on the next few years. There are two major steps that, according to me, can help us be better in manufacturing. These are:
Planned Infra Spending: India not just needs major improvement in infrastructure, but it needs it desperately in the shortest timeframe possible. The present Government has a reasonable track record of implementation so we can expect quick results that can bolster growth in the industries such as Cement, Heavy Vehicles, and Steel, which can further boost other interconnected industries.
Introduction of Vehicle Scrappage Policy: Though the details are awaited, we are hopeful to soon have clarity on this. This can have a highly positive impact on auto manufacturing and, in turn, on manufacturing in total as the major dependence is on the Auto industry.
The introduction of any cess in the form of Covid cess etc. would have caused a big concern in the industry as an additional burden. Not adding it is a positive step.
R&D is key to self-reliance
Spending on R&D in the Manufacturing industry or any other industry is negligible in India. We need to correct this. The Government can promote, assist and incentivize R&D centers, and offer SMEs to compensate their R&D expenses for creating this shift. There is no doubt that unless we increase our budget for R&D and invest ourselves in it, becoming self-reliant will remain a distant dream.
India’s innovation quotient to up
The Finance Minister has done a commendable job of announcing a bold yet thoughtful Budget that addresses the immediate need to power the economic growth engine, putting in place the building blocks for long-term growth and self-reliance by adequately funding core sectors, without overburdening the common man with new taxes and levies.
With this Budget, the ‘Atma Nirbhar Bharat’ takes the center stage once again and the message is clear – Innovate or Perish. This Budget will position India as a super power in terms of R&D, innovation, manufacturing, IT and services. The digital India push, setting of R&D centers, setting up of Fintech Hub at GIFT city, and allocation of `50,000 crore towards National Research Foundation will work towards boosting India’s Innovation Quotient on the global map and is a welcome move. This will further motivate the Indian Manufacturing sector to invest in R&D to compete with the likes of China and other countries in the global environment.
Constant innovation to move ahead
At Milacron, we lay emphasis on continual improvement. Be it through regular Kaizens, or through the R&D teams working together with the global teams. We innovate continuously, thereby providing new technologies and better performance machines to our customers at the most competitive prices. Our machines are now accepted in the USA, Europe, and South Americas. Our recent product launches are focused on sustainability in the plastic sector and our patented Mono Sandwich and LPIM technologies enable customers process recycled materials to produce products at reduced cost. We are fully convinced that investment in R&D and continuous innovation is the only way forward for the Indian Manufacturing industry.
A vision for ‘Atma Nirbharta’
The Union Budget 2020-21 was presented amidst the challenges of a global pandemic and swinging economy. The Union Budget has come at a time when the economy is recovering from the aftermath of Covid-19. With GDP contractions for the first time in several years, the challenges before the government were unprecedented and manifold. In the words of the Finance Minister, the Budget lays down a vision for ‘Atma Nirbharta’ or self-reliance and will further strengthen the resolve of Nation First. The Budget is focused on giving the much-required impetus to the Indian economy and at achieving the vision of the Indian Prime Minister for India to become a $5 trillion economy by 2024-25.
PLI, a positive push
Another important Budget announcement included the production linked incentive scheme (PLI). This will serve the purpose of providing incentives to producers. This will help the nation to grow as a hub for manufacturing and exports. This move should draw investments from global players. The scheme is also looking at encouraging local companies to set up new units or expand existing units in the country. This scheme suggests that eligible industry players will get incentives of 4 to 6 percent of production value after they are able to achieve their production and investment value target every year.
Chief Copy Editor
Magic Wand Media Inc