CETMA predicts consumer electronics showing negative growth

If the reaction of the Consumer Electronics and TV Manufacturers' Association (CETMA) to the Union Budget is anything to go by, manufacturers in these industries are far from happy. In a press release, CETMA predicts a negative growth for the consumer electronics industry in the coming year. And this, after a 20 per cent growth last year in colour TV (CTV) sales, thanks mostly to innovative marketing and cost effective measures by the industry to cut down prices.

CETMA points to the government’s apathy in ignoring two years of discussions, backed by adequate data, that convincingly argue in favour of granting 40 per cent abatement on MRP-based excise duty on CTVs. The government continues to maintain 30 per cent abatement on CTVs, as it has done over the past two years

The Association’s argument: since the factors for abatement have been the same for CTVs as that of other electronic items -- calculators, audio systems, audio two-in-ones, domestic washing machines, among others – that are covered under 40 per cent abatement, there is no justification for keeping CTVs under 30 per cent abatement.

While on televisions, colour picture tubes (CPT) is another area of unhappiness, with CETMA objecting to the government’s decision not to bring down the level of maximum protection being given to the domestic CPT manufacturers. Import duties on CPT remain at 42 per cent, which, argues CETMA, finds domestic manufacturers resorting to predatory pricing. CETMA has been requesting the government to bring down the import duty on CPT to 15 per cent, to the level of other electronic components, for the last 10 years. With an installed capacity of six million CPTs, Indian picture tube manufacturers do not need the over-protection policy of the government, feels the Association.

CETMA is also urging the government to lower import duties on products that are not manufactured in India. These include plasma TV, audio systems that are priced under $400, DVD players, CD players, projection TV and CD player mechanisms, arguing that this will spur the manufacture of hi-tech products in India since the consumption of such products are going to increase, giving a boost to other consumer electronics.

For black & white (B&W) TVs, the boxes that give the masses access to the TV medium, duties on picture tubes should be brought down, stresses CETMA. Also, the duties on FBTs, deflection yokes and mechanical tuners for B&W TVs should be brought down to nil from the proposed 16 per cent. The argument here is that to really reach the masses, prices of B&W TVs must still be reduced considerably.

The radio/transistor radio, the cheapest means of entertainment and communication to the rural populace and the urban poor, says CETMA, should not have the Cenvat of 16 per cent slapped on it. In fact, the Association strongly argues in favour of duty exemption on transistor radios that come for up to Rs 500 (MRP). This would be similar to electronic clocks with the same MRP. This would hardly affect the government’s revenue earnings, since it will earn from the 16 per cent duty on the components used in the radio/transistor.

As an item of mass consumption, CETMA is also urging the government to exempt from duty pocket calculators that are priced (MRP) up to Rs 500.