Budget 2019: Expecting cheaper electronic goods? These 5 factors will boost consumer durables industry

The Indian consumer durables industry is steadfast on its growth route and has been largely on the Modi Governments development agenda.

BJP government has devised various schemes to uplift MSMEs and boost FDI. (Image: AFP)

Budget 2019: The Indian consumer durables industry is steadfast on its growth route and has been largely on the Modi Governments development agenda. During its tenure since July 2014, the Bharatiya Janta Party (BJP)-led NDA government has devised various schemes to uplift MSMEs, boost FDI, besides relaxing GST on consumer durable goods and electronics since its rollout in 2017. As the centre gears up to present its sixth and last budget before General Elections 2019 on 1st February 2019, here’s a list of 5 things in Interim Budget 2019 that can boost consumer durables industry further: 1. Income Tax Exemption Slab A big expectation from the Modi government’s last budget is raising the Personal Income Tax Exemption slab from the current 2.5 lacs to 5 lacs. Various industry bodies have also suggested raising the deductions limit under section 80C. Less income tax means more disposable income, which is directly proportional to increased spending power and hence purchasing of consumer durable goods. 2. Rationalisation of GST Further rationalisation of GST on consumer durable goods from the current 18% slab to 12% Goods and Services Tax rate will boost sales for LCD TVs, refrigerators, washing machines, and many other consumer durable items. A long pending need to reduce GST on Air Conditioners from current 28% will increase penetration of ACs in the rural market which is still largely untouched. 3. Rural Economy The last 5 budgets by the Modi government have largely been rural populace centric. Be it electrification or road carpeting, Swacchh Bharat Abhiyan or healthcare schemes, the BJP has strengthened rural India in more than one way. The upsurge and development of rural economy in India will show a ripple effect on the consumer goods demand, thereby further schemes to boost the rural economy in Budget 2019 are highly anticipated by the sector. 4. MSMEs & Online Marketplaces The government has pushed for making India a Digital Economy. Online marketplaces have positively impacted consumer durable and smartphones sales in India, thereby, the government must take steps cautiously to regularize e-commerce platforms. On the other hand, Modi government has reduced Corporate tax from 30% to 25% for MSMEs with less than Rs.250 Crore turnover. In Budget 2019, the MSMEs expect the LTCG on sale of property to be flagged away, while large consumer durable goods manufacturers expect a rebate on Corporate Tax. 5. Employment Lastly, generation of employment opportunities is one of the most crucial factors in the GDP growth and overall boosts the economy. If the Modi government is able to create more employment avenues, the increased income levels with directly impact the sales of consumer durable goods.