Budget should help manufacturers think global, act local

By Niraj M Wanikar, Chief Editor, CNCTimes.com, 2022-01-31 17:43:00

The Union Government will be presenting annual budget for 2022-23 financial year on February 1, 2022. While the focus of the budget is likely to be on further accelerating the country’s pace of recovery from the pandemic and support India's healthcare system to secure against any future outbreaks, the government is also expected to continue to spend more to aid the recovery and put India back on a trajectory of higher growth. 

Even as the expected expenditure and revenue for the next fiscal will be concentrated towards mainly on strengthening the healthcare and the pharma sector along with thrust on other aspects of the economy such as agriculture, technology etc, the manufacturing sector seems to be wary about facing offerings for the industry. 

Manufacturing holds a key position in the Indian economy, accounting for nearly 16 per cent of the real GDP in FY12 and employing about 12 per cent of the country's labour force. Growth in the sector has been strong, outpacing overall GDP growth since the past few years. According to reports, India has potential to become a global manufacturing hub and by 2030, it can add more than USD 500 billion annually to the global economy.

Mr. Vineet Seth, Managing Director (APAC), Mastercam, says, “The budget may provide some tax relief in the short term, but recovery from COVID-19 will not be an easy or a one budget task. I hope that those involved in drafting the budget proposals are actively thinking on this point and taking necessary long term measures to benefit the market.”

“I also look at this as an opportunity for growth, investment and diversifying as either most manufacturing companies are re-thinking their strategies or starting new ideas. An example of this is the semi-conductor chip shortage that is plaguing the automotive industry. Policy level decisions on such opportunities will certainly speed up progress in the manufacturing sector,” Mr. Seth opined.

Asked about his expectations from the budget, Mr. Seth said, “The Government has been doing wonderful work in relation to assisting manufacturing growth, and particularly to MSMEs, who are the backbone of this manufacturing ecosystem. I would like to put forth my suggestions on what the budget should consider. Despite numerous schemes in place to help first generation entrepreneurs and micro industries, I feel there is much room for improving access to credit to this segment. A large number of micro industries and people fail to secure credit due to a variety of reasons, and if this is addressed, it will help create entrepreneurs in our ecosystem faster than we are seeing today.”

He further added, “Many MSMEs have a common problem of Cash Flow management. This could be due to delayed payments, which is being addressed already; but also due to technology based scalability and supply. Addressing this would ensure that the entrepreneurial spirit is not extinguished before it scales further heights. The MSME segment has great potential for increasing our country’s export share. Providing access to technology

and assisting them on a more focused level in respective markets will ensure that this ecosystem thrives, innovates and propagates further.”

Echoing similar feelings, Mr. Nikhil Modi, Marketing Leader, Phillips Machine Tools said, “Budget 2022 is going to be very crucial for setting India’s next phase of economic growth. One most important expectation is access of funds and credit for the MSME sector. It will massively help in new job and demand generation.” 

Reacting on his expectations from the budget, Mr. Manoj K Sundaram, Head—Business Development, Industrial Quality Solutions, Carl Zeiss India said, “We would be happy to see if the budget gives a push to the R&D in engineering and manufacturing. We are also looking at the investment announcemtns in the EV industry on Cell manufacturing, Vehicle assembly and desire that a major chunk is getting to core R&D in key areas of Cells, Motors, Cell Chemistry.”

“We can not thrive and reduce dependency on imports. Hence we want to see any announcements in this regard. We wish to see more directives/structure for academic and industry partnerships with mandates and timelines.  As a German multinational, we seek to have partnerships enabling knowledge transfer and clarity in funding at the right stage. This is crucial to develop the eco-system in the next 10 years,” Mr. Sundaram added.

Each and every sector has been facing tough times due to Covid-19 pandemic. The managements have been finding it difficult to cope up with the situation and initiating various steps that will help bring the economy back on track. An optimistic Mr. Seth opines, “I tend to look at every new day as a new opportunity. With Covid-19, our country has shown the world 

how resilient we are and how quick we are to adapt to change. I would like to assert this quality of ours, across the country, and treat at least the next 10 years as opportunity of a lifetime to re-think, re-engage and re-invent our manufacturing story.”

Elaborating further, he said, “I would encourage businesses and investors in other segments to take a closer look at our manufacturing potential and invest in this field to think global and make local. Discrete automation, Aerospace manufacturing, Chip Manufacturing, Ship-Building, Defence supply, Medical devices, Sustainable energy, Modern Agricultural Equipment, Environment Cleaning Equipment, Modern Transport systems are only a few of the opportunities that are lying ahead of us. A sound manufacturing policy, backed by a sound financial policy needs only dedicated and honest businesses to write a new manufacturing story for our nation in the next decade.”

Indians are known for their resilience and ability to come back strongly. This quality of ours will definitely play a major role in reviving every sector of the economy that has been going through a marginal slump. The upcoming budget is likely to give fire to this enthusiasm of ours by proposing measures beneficial to not only manufacturing sector in particular, but India’s trade and commerce in general. 

On a concluding note, Mr. Seth says, “It is not the job of the Finance ministry or the Government alone, to support manufacturing growth. I believe that each of us are responsible for Sustainable Manufacturing and if we do not heed the words of Lester Brown, ‘That we haven’t inherited the earth from our Forefathers, but are borrowing it from our Children,’ I do not know what will be motivation enough.” 

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