Union Budget 2018 presented by Finance Minister Arun Jaitley will drive the much-needed growth for MSMEs across sectors. The reduction in corporate tax for entities with turnover of up to Rs 250 crore to 25 per cent is expected to benefit MSMEs as well as the Indian machine tool industry which has a significant number of MSMEs. This is also expected to help the ease of doing business besides generating jobs.
Commenting on the overall significance of the budget, IMTMA President P. Ramadas said, “Government of India with this budget has tried to establish harmony between demands rising from various sectors and bringing some kind of a fiscal discipline to meet the country’s economic goals in the long-term. The aim to bring down the fiscal deficit to 3.2 per cent of the country’s GDP in 2017-18 will help the country’s manufacturing growth in the long run.”
Penning down his thoughts on the budget, Director General and CEO of IMTMA, V. Anbu said, “The reduction in corporate tax rate for MSMEs is a positive development since many of these units operate within prescribed limits. The incentives spelt out in the budget will bolster these units to enhance their production capacities.”
The increase in budget outlay for infrastructure development especially for railways electrification and capacity enhancement including development of tracks is expected to step up demand for coach manufacturing. This will also create a demand for a broad range of machine tools such as special-purpose wheel lathes, light-rail transit systems, and heavy duty single and double column vertical turning and lathes, large bridge type milling machines, horizontal lathes and special machines.
Further, the increased budget allocation for road and public infrastructure, rural infrastructure development and public healthcare will also give a fillip to these sectors and meet the aspirations of ‘Make in India’.
To sum up, IMTMA welcomes the announcements made in the budget. We believe that it will take some time for the buds to flower and create a demand for goods and services in sunrise sectors. The budget serves as a morale boost for the industry to charter its path through innovations and research which are vital for establishing long-term success for manufacturing in India.