The budget is a simple document that impacts the lives of all Indians. The budget can affect you directly - through tax cuts or regulatory changes - or indirectly - through a gradual change in the economy. This year, all eyes are on Nirmala Sitharaman’s 2nd Budget. With the economy in a slump, it remains to be seen if Budget 2020 will live up to expectations and help revitalise the economy.
If Budget 2019 was any indicator of what’s to come, then the Finance Minister’s team is on the right track. Although it didn’t completely pull the economy out of its slump, it did work wonders for certain sectors. As we eagerly await the budget of 2020, let’s look back at last year’s budget and how it turned things around for one particular industry - consumer electronics.
An onslaught of poor economic decisions, taken in 2017 and 2018, led to a slump in consumer electronics sales. Fortunately, the budget of 2019, with the right combination of incentives and reforms, managed to turn the tables on the falling sales.
As you can see in the given graph, by the number of products sold annually, the consumer electronics market in India has seen a rising graph in the past few years. Further, experts deem the growth sustainable because of the extremely low penetration rates. A recent IBEF report noted the “huge untapped market” of consumer electronics in India.
And yet, despite these positive long-term trends, the sector has experienced significant fluctuation in the recent past. The consumer electronics market took a bad hit due to demonetization. Sales dropped by as much as 40% in November and December of 2016. “We lost two months,” an Executive VP of Godrej Appliances said on the record.
Next year, due to the rollout of the Goods and Services Tax, the consumer electronics market witnessed a further slowdown in sales. For four consecutive quarters, growth was in single digits - and in one quarter, was flat.
With the budget of 2019, however, the government introduced a range of effective interventions that boosted the sale of consumer electronics. Below are a few of the most effective steps taken in the budget of 2019: