If there’s one big victim that has fallen prey to the consumption slowdown and real estate rut, it’s been the manufacturing sector in Chennai’s industrial belt. From automobiles to elevators, the slowdown has gripped this sector like no other. But could Budget 2020 get these companies to see some light at the end of the tunnel? CNBC-TV18’s Jude Sannith finds out.
‘Better consumption for better business’ as simple as that sounds, it’s the mantra that Chennai’s manufacturing sector is banking on, to revive business.
Automobiles for instance, Chennai-based Hyundai Motor India saw a 9.8 percent decline in year-on-year sales having sold less than 38,000 cars through 2019 as opposed to over 42,000 last year. And while the company is pinning its hopes on electric mobility thanks to the newly launched Kona Electric, and a yet-to-be launched cheaper, “mass-market” electric vehicle, it’s looking to the budget for incentives to keep costs low and spur consumption in the EV segment.
The need for more money in the hands of end-users – be owners of homes, cars or appliances is the one common thread across all manufacturing companies in one of India’s most industrialized states. Tax rebates and a re-look at income tax slabs is the flavour of the season.
NK Ranganath, India MD of Danish pump-manfacturer Grundfos, which has a plant in Chennai, says, “We are optimistic that this year’s Union budget will sharply focus on increasing demand for goods and services. The only way to increase demand will be to put more money in the hands of middle and lower income segments. This, coupled with the already lowered corporate taxes, should spur demand.”
Therefore, the verdict is clear. If you’re a manufacturer, the upcoming Union Budget is all about the money – money that you’ll hope finds its way to the hands of the consumer.