Budget

Top industry bodies laud digital push, raise some serious concerns too

Targeted number for the mobile manufacturing sector for 2022-23 is Rs 3,50,000 crore and Rs 4,40,000 crore in 2023-24

February 2, 2023

Targeted number for mobile manufacturing sector for 2022-23 is Rs 3,50,000 crore and Rs 4,40,000 crore in 2023-24

Govt reduces customs duty on import of inputs used in mobile phones

Top industry bodies hailed Finance Minister Nirmala Sitharaman‘s acknowledgment of the unprecedented manufacturing growth in the last few years while providing relief in customs duty on the import of certain mobile phone parts and other digital initiatives. They, however, raised some serious concerns too.

The Finance Minister mentioned that the mobile manufacturing sector crossed the manufacturing worth Rs.2,75,000 crore in 2021-22. The targeted number for 2022-23 is Rs.3,50,000 crore and Rs.4,40,000 crore in 2023-24.

According to the India Cellular & Electronics Association (ICEA), the latest steps will have no significant impact on the final product price but are generally in the right direction. The cost impact on mobile phone’s Bill of Material (BoM) will be 0.16 percent to 0.19 percent.

“A high-performing sector’s genuine requests have not been addressed. These could have provided a significant impact on competitiveness leading to better exports, arresting the grey market, and boosting revenue,” said Pankaj Mohindroo, Chairman, ICEA.

According to him, capping of BCD on the import of high-end mobile phones would arrest the burgeoning smuggled market which has crossed Rs.12,000 crore in 2023.

“This measure would have boosted government revenue, reduced smuggling, ensured fair trade, and helped build legal businesses in India,” said Mohindroo.

“We also sought removal of input duties of 2.75 percent duty imposed in the previous budget on the many Inputs of PCBA, inputs of connector and inputs of the camera module,” he added.

The Cellular Operators’ Association of India (COAI) said that the budget lays emphasis on innovation, job creation, and skilling, with the continued push towards ‘Digital India’.

“We welcome the announcement on setting up of 3 centers of excellence for Artificial Intelligence (AI) and 100 labs in engineering colleges for the development of 5G applications, which are progressive steps and would help fuel the proliferation of 5G and its ecosystem in the country,” the association said in a statement.

“Telecommunications is the backbone of India’s digital economy, as established by the success of the JAM trinity – Aadhar, Jan-Dhan Yojana and penetration of mobile telephony, which has propelled financial inclusion in recent years,” said Lt Gen Dr. S P Kochhar (retd), Director General, COAI.

“The 200 percent increase in rural internet subscriptions between 2015 and 2021 in comparison to 158 percent in urban areas bears testimony to the efforts being made jointly by the government and the industry for enhancing pan-India digital connectivity,” he added.

According to the Internet and Mobile Association of India (IAMAI), the good work on the digital front by the government continues in form of simplification of the KYC and unified filing process by strengthening facilities under DigiLocker and the announcement for the Entity DigiLocker, which takes public digital goods to the next level.

“However, there have been two critical concerns for the digital industry: first, the growth rate of digital penetration has slowed down and second, there is a clearly identifiable digital divide in India with some sections getting marginalized as they are not onboarded digitally,” said the IAMAI.

“IAMAI believes that there are certain persisting systemic challenges that impede the growth potentials of start-ups or even the ESDM sector in India. While the budget announcement marks the correct intention and fiscal incentives, other ministries need to complement the Finance Minister’s grand vision to help realize her vision,” said the industry body.

[With Inputs from IANS]

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