ACMA welcomes Budget’s focus on inclusive growth, focus on MSMEs to help component Tier 2s/ Tier 3s

New Delhi, March 1, 2013: ACMA, the apex body representing India’s auto component sector, has welcomed the thrust given in the Union Budget towards sustaining economic growth and making it inclusive. The industry body has expressed satisfaction on the focus on infrastructure development, education, skilling, infrastructure development and attracting investments in manufacturing. Further, it also appreciated the measures announced for sustaining growth and scaling-up of the MSME sector.

ACMA president Surinder Kanwar said, “We are glad that the finance minister has unveiled a pragmatic Budget with adequate focus on development of the social sector as well as the industry. ACMA also welcomes the focus on measures to encourage the Micro, Small and Medium enterprises (MSMEs). MSMEs constitute over 70 percent of ACMA’s membership and scaling-up has been a challenge for the sector. With assurances in the Budget that the incentives enjoyed by MSMEs would continue undiminished for the next three years should they outgrow their limits, is a step in the right direction. Further setting up of additional tool rooms and Technology Development Centres will encourage technology development and absorption in the MSMEs. It is also heartening that corporate funding of incubators located within academic institutions will qualify as Corporate Social Responsibility (CSR) expenditure.”

Kanwar further added, “The enhanced allocation of over Rs 14,000 crore for buses under the JNNURM will also give a boost to this segment and the associated auto component consumption, which has been suffering for sometime now. Further, shortage of skilled manpower has been an issue of significant concern for the auto component industry, the outlay of Rs 1,000 crore in incentives for skill development will encourage youth to engage in appropriate vocational training which will benefit the industry.”

However, the increase of excise duty from 27 percent to 30 percent on SUVs, which has been one of the fastest growing segments, is a negative for the Budget.