Budget 2014 is a statement of intentions for manufacturing sector: SV Sukumar
July 11, 2014
Business Today spoke to S.V. Sukumar, Partner and Head Strategy & Operations Practice, KPMG in India, on what were the key takeaways for him from Finance Minister Arun Jaitley's maiden Budget for 2014-15.
"From the manufacturing sector's point of view, the Budget comes across more as a statement of intentions than concrete actions. Taking GST to its logical conclusion, one gets a positive comfort but there is no clear road map as to how resisting states will be won over. FDI in defence will be a positive step as this will help India to move up a notch or two in terms of high-tech manufacturing.
Though the finance minister spoke about reviving the manufacturing sector, most of them seem to be secondary drivers except for metals. The boost to infrastructure such as 16 more ports, developing seven industrial cities, investment in roads, FDI in real estate etc. will trigger demand for construction-related manufacturing industries such as metals and cements. Revisiting coal linkages and harmonizing duty structure of coke and coal is also a positive step.
Overall, it appears the government is still making up its mind on major policy decisions and to that extent this Budget looks like an Interim Budget. Having said that, many decisions related to mining and environmental clearances etc. are not necessarily related to only Budget and can be addressed any time."