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Union Budget 2017: Offer Support For Digital Growth
The government needs to give incentives so that corporates invest their time and money in skilling India
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With digital revolution taking center stage, mobile phones and technology have become an inevitable part and an extension to our existence. India today is the fastest growing smart phone market in the world and this trend is evident by the massive influx of mobile handset brands into the country. With 60 million feature phones worth Rs 5,000 crore and 50 million smartphones worth Rs 49,000 crore manufactured in 2015-16, and mobile handset industry employing 40,000+ manpower, it has become the right platform in driving Government's major initiatives - Make in India, Digital India and Skill India.
Mobile handset manufacturing is estimated to be a Rs 54,000 crore industry in 2016-17 and expected to grow to Rs 94,000 crore this fiscal year.
These initiatives are giving impetus to the penetration of smart phones beyond metros, Tier 2 & 3 cities into the hinterland. Demonetization and cashless drive is further fueling the demand as people are finally going for mobile banking and digital payment services, telcos apps, UPI and USSD. Post-November 8th, digital payment apps have seen user growth of over 150% and handset players are now preparing to introduce 4G-VoLTE feature phones that will enable digital drive in rural India where features phones still rule.
In consumer durable segment, the penetration of items like refrigerators and washing machines in India is considerably lower as compared to international standards. For example, TV penetration in Indian household is 60% against 89% elsewhere and washing machine stands only at 9% against international standards of 70%. In our vision, the inclusive India needs to have better penetration of these basic technological needs not just in mega cities but in tier I, II, III cities and rural areas as well for the holistic growth of the country. With the continuous focus of present government on rural infrastructure and availability of power and connectivity, we expect both mobile handsets and consumer electronics industry to grow exponentially in coming years.
Government of India has taken great steps to support these industries in the recent past with its unique initiatives. PM has set out a vision for establishing India as Global mobile phones and component manufacturing hub and constituted a Fast Track Task Force - 500 Mn phones (value: Rs 3 Lakh Crs), 50,000 Cr Component industry and 15 Lakh employment by 2019-20. In the last two years, 42 new mobile phone manufacturing units along with 15 new component units were set up in India creating an additional direct employment of 50,000 in the last one year. While the government is working tirelessly towards making that vision a reality, a long term stable policy on manufacturing and R&D still needs to be laid out as frequent policy changes adversely affect the investments in India.
In order to boost local manufacturing, skilled manpower is critical. Training of youth for repair and refurbishment will be the most efficient and effective way to implement it. For this, the government needs to give incentives so that corporate invest their time and money in skilling India. Incentives to create sufficient technical manpower will lay foundation for the future of India and empower youth to be independent and have a better life for themselves.
Further, a clearly laid out research and development policy will help to succeed in a highly technical industry like ours and also help create a component manufacturing ecosystem in India to unleash the manufacturing prowess. The upcoming Union Budget should spell out reforms that rejuvenate consumption, businesses & economic engines of the country.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.