Vibrant manufacturing is critical for the country’s growth. The incentives given in the Budget are but an initial step, said PG Jadeja, President of the Indian Machine Tool Manufacturers’ Association (IMTMA).

“The Budget sops will take some time to trickle down to the end users, which will result in demand for goods and services picking up. However, with the momentum given by this Budget, the machine tool industry will pick itself up and traverse on the right track,” he explained.

Construction equipment

The machine tool industry is looking forward to a healthy order book from construction equipment and machinery involved in the housing sector. Jadeja said “affordable housing has been a long-standing demand of the realty sector and granting ‘infrastructure status’ is likely to boost manufacture of machines meant for construction activity.”

Welcoming reduction in the income tax to 25 per cent, Jadeja said it is a positive step towards development of the MSME sector and enhance their production capacities. Machine tool industry is the backbone of MSMEs. At present, the Indian machine tool industry comprises about 1,000 units engaged in the production of machine tools, accessories/ attachments, sub-systems and parts.

MSMEs major beneficiary

“Of these, around 25 in the large-scale sector account for about 70 per cent of the turnover and the rest are in the MSME sector and this sector stands to benefit a lot from this Budget. The ministry’s move, therefore, will eventually give an uptick for the machine tool industry business,” explained Jadeja.

The Budget offers growth tonic for MSMEs especially such as 5 per cent reduction in income tax, longer carry forward of minimum alternate tax credit and three year tax exemption for start-ups, doubling the lending target under MUDRA Yojana will ease the doing of business and create jobs.

Customs duty cut

Explaining the Budget proposals’ impact on machine tool industry, Jadeja, said, “The customs duty reduction from 7.5 per cent to 2.5 per cent on three critical components (CNC systems, ball screws and linear motion guides) has been extended to all CNC machine tools under HSS code 8456 to 8463. This will have a direct bearing on the machine tool industry and enhance its development.”

The setting up of the next phase of ‘Skill Strengthening for Industrial Value Enhancement’ (STRIVE) at a proposed budget of ₹2,200 crore in 2017-18 and 100 India International Skill Centres across the country will ensure availability of skilled manpower for the industry.