JK Sharma, CEO of Yansefu India comments: Although, the Union Budget 2020 has been neutral for the printing and packaging industry, the reduction of custom duty on imports of newsprint and light-weight coated paper from 10% to 5% is something to be appreciated.
A few measures taken by the government may have indirect impact on the industry. The Union Budget has given impetus for agriculture, entrepreneurship and MSMEs in both rural and urban sectors which will help to revive the India’s economic growth. The growth of these sectors would subsequently boost the consumption in the rural and urban areas, which will hopefully generate more requirements and opportunities in the printing and packaging industry.
Additionally, the increased custom duty on imports of electronics and other less technology-driven products not only give a push to the ‘Make In India’ initiative, but also provide drive for allied industries like printing etc. to help manufacturers to meet their packaging requirements as well as for marketing their products.
The positive takeaway from this budget would be the income-tax relief for the lower and medium income groups. The income tax reduction could be seen as an indirect measure to increase the purchasing power of the lower and middle-income groups. The cascade of the same into the FMCG sector is something to be expected. Since the packaging industry is directly proportional to the FMCG growth, it will see its impact through increasing demands.
Dividend Distribution Tax levied on dividends distributed by companies to the shareholders has been discontinued. Instead, the recipients of the dividend will have to pay tax at their applicable rate. Again, this would be beneficial for the Indian companies, including the printing and packaging sector as this will give confidence to existing and new foreign investors to invest in the Indian market, which certainly will give a boost to the India’s GDP growth.
Yansefu welcomes the FY union budget 2020 and firmly believes that the measures taken by the government will have long term benefits to strengthen the nation’s economic growth.