IESA on the Union Budget 2013-14

INDIA: The India Electronics and Semiconductor Association (IESA) welcome the budget for its boost to the Indian Electronics and semiconductor industry. We believe the steps outlined for this sector by the Hon’ble Finance Minister will help to boost this sector by attracting investments, promoting entrepreneurship and domestic manufacturing,

1. About the investment allowance of 15 percent, in addition to the current depreciation benefits, IESA believes this will significantly aid in attracting investments into this sector.

2. About the import duty on set-top boxes (STBs), the IESA welcomes the increase in import duty on this product, which is one the fastest moving electronics products today. There is a potential for  100 million STBs over the next two to three as a result of the digitization of cable act, and we believe this increase of import duty will help Indian manufacturers to address the Unfair advantage imported set top boxes are getting and will boost domestic manufacturing of Set Top Boxes in India.

3. About the fab, the IESA welcomes the 0 percent customs duty for import of equipment for the fab. IESA believes this will help in improving the viability of the project for the investors.

4. About the 17 percent increase in the outlay on education, IESA welcomes this move. Both skill development and R&D are areas that are critical to India. IESA also welcomes the Rs. 10,000 grant for youth who will undergo an NSDC approved Skill Development Course and obtain certification.

5. IESA also welcome the Rs 200 crore fund to be setup to help innovators and inventors scale up their inventions and develop products aimed for the masses.

6. About the support to the entrepreneurial ecosystem, IESA welcomes the support to kick start the entrepreneurial ecosystem in India, especially the following two initiatives:
a) investments in technology incubators established in academic institutions being recognized as CSR.
b) The decision to recognize angel investor pools under SEBI guidelines will also help to grow this segment and encourage HNIs to come forth and invest as Angel Investors, thus helping again to grow the entrepreneurial ecosystem.

7. The budget will also benefit the MSME sector through the measure of doubling the SIDBI’s refinancing facility to MSMEs to Rs 10,000 crores

8. The IESA welcomes the strong commitment to infrastructure development, particularly the continued support to the DMIC and the two other infrastructure corridors of Chennai – Bengaluru and Bengaluru – Mumbai.

9. About the establishment of the National Clean Energy Fund, the IESA welcomes this initiative to provide low cost funding through IREDA to clean and green energy projects as it will help to boost the renewable energy sector.

10. Rules for safe harbor for the development centres – IESA also welcomes the announcement to notify the rules for safe harbor for the development centres based on the report of the Rangachary Committee, which wil submit its report March 31, 2013.

11. The setting up of a  Standing Council of Experts in Ministry of Finance to examine transaction cost of doing business in India is a welcome move which will help in ease of doing business in the country

Provisions yielding adverse impact
12. Higher excise duty on mobile phones above Rs 2,000. This is a  blow to domestic mobile handset makers, as excise duty on instruments priced above Rs 2,000 has been raised to 6 percent from the earlier rate of 1 percent.