Machine tools industry eyeing the prospects

Shrinivas Shirgurkar – Ace Designers Limited

The budget announcement has several new initiatives to promote investment in manufacturing such as Infrastructure projects, easing of FDI in Defence and Railway production creating demand in the entire manufacturing value chain. To support easier implementation the Government has announced several reforms in easier land acquisition, quick clearance of the necessary licences.

Machine Tool Industry trend:
More than half of demand for machine tool industry is from Automotive Industry and the other half is shared by General Engineering and the rest of the manufacturing industry. One of the main demands in the manufacturing sector is for very high accuracy; reliable machines with automatic loading and unloading system in the automobile industry and the rest of industry want sophisticated multi-function machines for completing all the operations for the components with minimum set up change. Above all there is need for affordable machining solutions.

Budget impact:
The budget announcement has several new initiatives to promote investment in manufacturing such as Infrastructure projects, easing of FDI in Defence and Railway production creating demand in the entire manufacturing value chain. To support easier implementation the Government has announced several reforms in easier land acquisition, quick clearance of the necessary licences. Above all government has announced a strong ‘Make in India’ Initiative covering all facets of setting up and ease of doing business. Additionally the implementation of GST regime from April 2016 has given hope and comfort to the manufacturing Industry. All these will certainly see growth picking up perhaps after three or four quarters, when many of the projects fructify.
However in the immediate future there is no specific announcement whether in direct or indirect taxation to spur demand, except that with lowering of inflation, there are hopes of lower interest rates.