New Delhi, Mar 1 (KNN) Make in India, the laudable goal announced by the Hon'ble Prime Minister, Shri Narendra Modi, has been given a far back seat in Budget 2016.

Keeping silent on this important issue in his main budget speech, Finance Minister, Shri Arun Jaitley has introduced   some tax restructuring in the  Information technology hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair etc. in his tax proposals.

Interestingly, most of the concessions given in Excise Tax and Customs Duty are for inputs used typically by large sector like Machinery, electrical equipment, instrument used for semiconductor wafer fabrication/LCD fabrication units.

While these may be welcome steps to promote electronics industry, the engineering industry in the MSME was eagerly looking for some sops in this year’s budget.

Anil Aggarwal, Managing Director of PME Power Solutions India Ltd, said, “Make in India cannot happen just with the large companies. The SMEs play a vital role in this.”

Aggarwal said that more than the small companies, large firms are turning NPAs which affects the entire economy.

He said the Finance Minister should also think about the MSME sector which has been ignored in the budget.

High tariffs and minimum import price on steel items are making the engineering items highly uncompetitive in export market and also in deemed export of projects where Indian industries compete with global firms.

Naveen Jain, Managing Director of Dayachand Engineering said, “While in the Economic Survey, there was a mention about the safeguard duties on finished goods, whereas in the Budget there was no mention about it.”

Jain said that the absence of any such measures would badly impact the Make in India vision of the Government.

The Budget would just benefit the large players as the MSMEs have been completely ignored this time, he said.

More interestingly, in other basic metals like Aluminium, where prices are on a tailspin in global market, the Customs Duty has been raised to protect the domestic large manufacturers.

For Aluminium alloys and Zinc alloys the enhancement in Basic Customs Duty varies between 30 to 50%, from 7.5% to 10% in case of Aluminium products.

How this will encourage ‘Make in India’ for the large number of MSME Electrical and other Aluminium based items manufacturers is anybody’s guess.

Again, for encouraging productivity and quality in the MSME sector, the Import Duties on the CNC machines and other high performance machines should have been reduced.

But instead Customs Duties on some machines have been enhanced to protect the domestic machine manufacturers, again mostly in the large sector.

The skewed view of the Government to the MSME sector is further demonstrated in Textiles, where the Excise Duty on Readymade garments increased, the tariff value enhanced  and even the basic fibre used (PSF / PFY) proposed to be taxed at a higher rate.

“This is definitely impact the textile industries in the country,” said Animesh Saxena, Managing Director of Neetee Clothing.

The above measures will affect the cost structure of the entire value chain of the Readymade Garments industry, which is predominantly in the MSME sector. (KNN/ DB)