Capital Goods

<span style="font-weight: bold;">Proposals</span><br />
<ul>
<li>Mechanism proposed to buy surplus solar energy from solar pumps by distribution companies (DISCOMs) at a reasonable price.</li>
<li>Allocation of Rs 3,800 crore and Rs 4,900 crore for Deendayal Upadhyaya Gram Jyoti Yojna (DUGJY) and Integrated Power Development Scheme (IPDS), respectively.</li>
<li>Allocation of Rs 16,000 crore under the Saubhagya Scheme to enable last mile connectivity for rural households.</li>
<li>Increased capex by railways, particularly for electrification and augmentation of line network.</li>
<li>Capital expenditure proposed under the smart city programme for deployment of rooftop solar capacity.</li>
<li>Customs duty lowered to nil from five per cent for solar tempered glass.</li>
<li>Reduction in corporate tax rate to 25 per cent for entities with turnover of up to Rs 250 crore.</li></ul><br />
<span style="font-weight: bold;">Impact: Marginally Positive</span><br />
The mechanism proposed to buy surplus solar energy from solar pumps by the distribution utilities as well as push for deployment of solar energy under the smart city programme are encouraging for PV module manufacturers, EPC and system integrators/channel partners. Moreover, the reduction of duty from five per cent to nil on solar tempered glass will result in a marginal reduction in module cost and will work positively for domestic solar PV module manufacturers. Further, the allocation for rural electrification and system strengthening of the distribution network under the Saubhagya scheme, DUGJY and IPDS, as well as higher allocation for capex in the railways and the defence sectors would boost order inflows for the capital goods segment. The reduction in corporate tax rate for entities with a turnover of up to Rs 250 crore can be encouraging for eligible capital goods and EPC companies. <br />
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<span style="font-weight: bold;">Sunil Kant Munjal, Chairman, Hero Enterprises &amp; Member Prime Minister¦s Council on Trade &amp; Industry</span><br />
The Finance Minister has done a pretty impressive job considering the wide canvas of areas that he has covered and complex economic situation that exists both domestically and globally at the moment. He has touched upon a wide spectrum of constituents such as the rural economy, smart cities, aviation, agricultural clusters, healthcare and education. The coverage is impressive, with some of it involving pretty large spends. The biggest question is now one of the mode of implementation, so that the full benefits of some of these very impressive schemes can be realised. Reduction in corporate tax to 25 per cent for MSMEs is a welcome move. All companies with less than Rs 250 crore turnover will be able to avail of a reduction in income tax. But, that is something the whole of Indian industry was hoping for and so is welcomed by all. But, I guess, with all of these large spends, the government also has to balance its own budget.<br />
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<span style="font-weight: bold;">Shreekant Somany, Chairman &amp; Managing Director, SOMANY &amp; Chairman, CII National SME Council</span><br />
The Budget is highly focused on farmers, rural economy and infrastructure. These were the areas that primarily needed to be looked at, and the government has done that in the Budget. <br />
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Of course, there is not much that could have been done. Corporate India would have wanted reduction in taxes, which was promised, but has not happened over the years. Beyond that, one of the good things that has happened is the direct labour employment that has been extended to all sectors and will help in cutting down the middlemen. <br />
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Whatever has been announced for MSMEs is a welcome step. But there is a lot that needs to be done, because I personally believe that it is one industry segment that has the highest potential for job creation and is of value addition to the country.<br />