Budget 2018 Reactions: The Budget Is Very Strategically And Carefully Thought Of, Manish Sharma
In an exclusive interview with BW Businessworld, Manish Sharma, President & CEO, Panasonic India Pvt Ltd, shares his views on the Budget introduced on February 1st. Edited excerpts:
There will be a BW Report Card – On a scale of 1 to 10, how do you rate the budget?
It’s a balanced budget, if you look at the holistic picture of how this budget looks like from 2 points of view. One is mid-term and second is immediate. I would rate this, on a scale of 10, around 6.5. The reason I say that is, one, it is an increment of what has been happening for the past 3-4 years. Which means it is progressive. When you look at some specific policy interventions, in particular, the National Policy for Electronics, the phase manufacturing program, I believe that these are logical steps, in particular to our industry. So I am not commenting on the whole budget, like how it looks from the point of view from various other perspectives, but specific to consumer durable industry, very specific to enabling the manufacturing to happen, and hence jobs to happen in the country. Some of the announcements which have happened in terms of, which will have a large run-off effect, on creating a larger demand for products, affordable housing has been spoken off, enabling rural electrification, a large amount of the budget has been allocated. There is a large amount of budget allocated for the road infrastructure. I feel that there might be no direct impact of such announcements, very specific to how the electronic manufacturing will be enabled in the country. But I am sure there will be a rub off, of such infrastructure enablement when it happens in the country. So we are extremely optimistic.
Do you feel this is an election budget?
Obviously, it has to be an election budget and why not? But from my point of view, I think it is an increment to what has been happening all this while, which gives a sense that guys across the government, of course in collaboration with their industry counterparts are thinking very strategically, very logically and in a manner which is progressive. So therefore yes, there might be a possibility. So when you look at certain announcements where there is a significant advantage, like the insurance in particular, I think there’s a huge boost and why not? I am taking it extremely positively.
Is the jobs/ employment issue adequately addressed in the Union Budget?
They spoke about 7 million jobs. I believe this continues to be a challenge. We have to do more. Fiscal deficit again continues to be a challenge, we have to really do more. But there is no magic wand which is available, and I particularly feel that yes, some more policy intervention we were expecting, which will help our industry, in particular, for example, we have been advocating and expecting that consumer durables should not be considered in the luxury category. So consumer durables still continue to get treated in the 28% GST bracket. There our expectation is that if the GST tax can be reduced from 28 to 18, this will help the industry to penetrate these products, let them be more affordable. And penetrate into and increase the demand, which will have a significant impact overall on the industry also, and in terms of the revenue collection by the exchequer in terms of taxes.
Is the rural distress/ agriculture crisis adequately addressed in the Budget?
At least the sentiment would be addressed, I would say, because it’s a complex subject. It needs seamless execution to happen of whatever announcements have happened. Because the last mile connectivity or the inclusion which they talk about, is not an easy thing to execute in a large and a complex country like ours. But I am reasonably sure that the sentiment would be uplifting, with these kinds of announcements. And the intention of the government in terms of their mid-term approach, will definitely be taken in a positive spirit.
How do you summarise the Union Budget, in a few hundred words?
So I would say that this budget, one, is not exponential. It is incremental. And again my comment is very specific to how our industry looks at the budget and the opportunity at large. Second I would say that it is very strategically and carefully thought of. Third, part of the recommendations of the industry have been considered which is a reflection of a collaborative approach which the government of India has been advocating for a while. Still, we are left with some more expectations, I believe in particular to the GST, which we were expecting not to be a part of the budget announcements anyway. So we will continue to reflect upon our expectations in the time to come.
