- The government's proposals will incentivize domestic manufacturing and value addition in a range of electronic products, including set top boxes, broadband modems, CCTV cameras, and mobile phones. All of these are high growth electronic products - CCTV cameras, for instance, are an integral part of smart cities. The Indian Cellular Association, in an upbeat media release, stated that the budget has paved the way for the establishment of a components industry (mobile phone chargers, batteries and wired headsets) worth Rs 7,000 - Rs 10,000 crore by 2018. A differential duty regime here will mean that domestic manufacturing is far cheaper than importing it.
- Apart from IT hardware, customs and excise duty structure changes have been proposed in capital goods, defence production, textiles, mineral fuels and mineral oils, chemicals, paper, maintenance repair and overhauling of aircrafts as well as ship repair.
- New manufacturing companies, or those incorporated on or after 1.3.2016, will be taxed at 25 per cent, apart from surcharge and cess. However, there is a catch: these firms cannot claim profit linked or investment linked deductions or cannot avail of investment allowance and accelerated depreciation.
- Becoming investor-friendly. Foreign investors to be accorded 'Residency Status'. Currently, they are granted business visa only up to five years.
- Long-term: the focus on skills development. Will make people employable for the manufacturing sector.
HIGHLIGHTS:Union Budget 2016
FULL COVERAGE:Union Budget 2016