White goods sector unhappy with budget

By Our Special Correspondent

NEW DELHI, MARCH 5. The consumer electronics and home appliances sector, which has started feeling the pinch of slow demand in recent months (except for the AC segment), has expressed disappointment over the budget proposals.

On one hand, the budget lacks growth impulses for the consumer electronics and IT/telecom sector, on the other some consumer goods such as fridges, washing machines and ACs could become costlier because of linking of counter-vailing duty with the maximum retail price, points out the Samsung India Managing Director, Mr. K. R. Kim.

A major end-user of colour picture tubes, the industry association of the electronics goods had been campaigning aggressively for lower customs duty as it accounts for 40 per cent of the cost of a colour TV.

The reduction in CPT cost would have impacted the cost and consequently the price of a CTV, pointed out Mr. Kim.

On the positive side, the abatement on CTV for excise purposes has been increased to 35 per cent should give some relief to the industry.

The waiving of the surcharge on customs duty should also have a marginal impact on the prices of imported CTV products. ``In overall terms, the budget does not really boost growth in the consumer electronics and IT/telecom, sectors,'' summarises Mr. Kim.

Mr. Ajay Kapila of LG Electronics also concurred with Mr. Kim by pointing out that customers could expect the cost of fridges to go up.

``The budget helps no one. The manufacturers have been weakened by a no growth economy, eroding profitabilities, weakening rupee against dollar, higher input costs of raw materials and declining sales. The customer is unjustifiably denied his right to buy new product at global prices. And the Government has offered no possibility of enhancement of revenues on account of increase in growth rates of sales. No one is wiser,'' he concluded.

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Section  : Business
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