The finance minister of India, Nirmala Sitharaman, is all set to present the Union Budget for the financial year 2022-23 on February 1. All sectors are looking forward and are optimistic about the budget. The budget assumes importance as it comes in when the country is tackling the third wave of Covid-19. From reducing GST to addressing price hike issues, brands are optimistic about the Union Budget 2022.
“The economy has witnessed high levels of inflation across industries in the past year, influenced by rising input costs and disruptions in the supply chain. Recognizing these pressures, we are hopeful that the government will reduce GST to address price hike issues,” says Neeraj Bahl, MD & CEO, BSH Home Appliances. Bahl also appeals to the government to consider a reduction on import duties, as high duty rates are impacting the growth potential of the consumer durables category especially in emerging segments like Dishwashers.
While Bahl lauds the government’s efforts around the PLI scheme which has given impetus to companies like us to deliver on our commitment towards ‘Make in India. He looks forward to such pro-growth schemes and measures which will further accelerate the industry to manufacture locally.
“We are optimistic on the recovery and growth potential of the consumer durables industry with premiumization driving the category ahead,” he added.
As the consumer durables industry is facing challenges with raw material costs for more than a year, Parag Kulkarni, Managing Director, A. O. Smith India is optimistic that the Union Budget will help reduce cost pressures for manufacturers and improve affordability for consumers.
“The budget may also look at reducing taxes on eco-friendly and energy-efficient products, which could help drive demand and increase consumer adoption of sustainable products,” he added.
As water purifiers and water heaters have become essential household items. Kulkarni expects the budget to help rationalize tax rates on these consumer durable items, increasing the popularity and need for these products in India.
“We hope that the residential real estate market will also be positively impacted by the budget. Real estate is the second-largest market after agriculture, generating large scale employment and supporting multiple allied industries. We are hopeful that the upcoming Union Budget will help usher in a balanced combination of reforms and regulations, which will contribute positively to India’s growth,” Kulkarni added.
According to Dinesh Chhabra, Chief Executive Officer, Usha International, this year’s Union Budget sets the stage for economic revival, especially given the advent of the third wave.
“Despite the highs and lows, the consumer durables industry has managed to bounce back fairly well and continues to grow steadily. Having said that, the abnormal surge in the price of raw materials, which started increasing over a year ago, has cast a shadow on revenue forecasts and continues to pose a grave challenge for companies. In addition, supply-chain logistics issues are also adding to the burden for businesses. For brands uncompromising in their quality business becomes unviable, unless the part of the price rise is passed on to the consumer. This rise in prices is impacting consumer spending, adversely affecting the recovery and growth of our economy. The need of the hour is for the government to intervene and put in place some policies in this year’s Union Budget, that will facilitate rationalization of the costs of raw materials, fuel, and help smoothen the supply chain,” he said.
“Further, as digital adoption and transformation accelerate, there is a need for increased allocation to improve internet infrastructure and connectivity to bridge the rural-urban divide across geographies. We are hopeful that the upcoming Union Budget will be aimed at accelerating economic reforms, promoting entrepreneurship, and providing stimulus packages that will help fuel consumer demand across sectors,” Chhabra added.
The Gems and Jewellery sector contributes to 7% of India’s GDP and forms around 12% of the export basket and plays a critical role in terms of employment generation.
“Over the past year, the industry bounced back and performed well due to multiple positive steps taken by the government including reducing the import duty on gold and silver as well as ensuring there were no drastic increases in personal taxes. Beginning 2021, we also noticed that consumers moved towards purchases that were meaningful and brought value to their lives where jewellery played an important role. We look forward to the forthcoming budget in view that the gems and jewellery sector plays a pivotal role in the growth of the economy,” said Sachin Jain, Managing Director, De Beers India.
