What was the import of the recently announced Union Budget for 2024-25 for the wood-based panels and furniture manufacturing sector in India? What are its likely implications? Read the views of some industry professionals…

Sayeed Ahmed

(CEO, Biesse India, Bengaluru)

Budget 2024 looks promising for the manufacturing sector, which stands to gain significantly from the increased support for MSMEs in capital investment. Key initiatives, such as the Credit Guarantee Scheme, the enhancement of the Mudra loan limit to ₹20 lakh, and credit support during stressful periods offer substantial encouragement for investment and growth in the manufacturing sector.

Providing MSMEs crucial support for capital investment and credit during challenging times will invigorate entrepreneurs. Establishing industrial parks with accommodation provisions will facilitate MSMEs and help relocate skilled manpower to industrial zones.

Investments in housing and infrastructure development will be key drivers of growth in manufacturing, further benefiting the woodworking industry. The Budget’s emphasis on skilling and upgradation initiatives is pivotal.

The creation of a skilled workforce through enhanced training programs, upgrade of Industrial Training Institutes, and industry-aligned course content will address the industry’s need for qualified personnel. This will enhance productivity and innovation in the woodworking sector.

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Saurabh Jain

(President, Decora Kitchen Interiors, Gurugram)

Budget The Union Budget’s substantial allocation of ₹11 lakh-crore for infrastructure development is a significant positive. Enhanced urban and rural infrastructure will spur real estate growth, indirectly boosting demand for the furniture industry.

The focus on MSMEs through credit guarantee schemes and the establishment of e-commerce export hubs is another growth driver. Changes in tax policies, including revised tax slabs and reduced customs duties on some products, are expected to increase disposable incomes, leading to higher consumer spending on furniture.

Programmes like ‘Make in India’ have encouraged domestic manufacturing, providing a fillip to the furniture sector. Budget 2024 leans more towards being a growth driver than a bottleneck. However, the challenge lies in the implementation of these measures. The onus now lies on industry stakeholders to leverage these opportunities and drive sustainable growth.

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Nirav Shah

(MD, Jai Industries, Ahmedabad)

To pursue the goal of ‘Viksit Bharat’, the Union Budget envisages sustained efforts for development of the manufacturing and services sectors to generate employment and upgrade skills.

Of note are the various incentives to strengthen the MSME sector: Credit Guarantee Scheme for MSMEs for purchase of machinery and equipment without collateral / third party guarantee up to ₹100 crore; new credit assessment model for public sector banks; Mudra loan up to ₹20 lakh; platform (TReDS) to convert trade receivable (sundry debtors) to cash; and E-commerce export hubs to support MSMEs to sell products globally.

Though the government is expressing its intention to promote ease of doing business, there is no relief for payment within 45 days to MSMEs. In my view, the government should have excluded the transactions between MSMEs from the provision of MSME Act, more particularly payment within 45 days.

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Mehul Agarwal

(Director & CEO, Dorby Panels, Navi Mumbai)

Reforms and initiatives in manufacturing, logistics and infrastructure significantly impact our growth aspirations. Furthermore, the reduction in the turnover threshold for MSME buyers on the TReDS platform from ₹500 crore to ₹250 crore is another reform that stands to benefit the MSME sector significantly. It will improve liquidity and working capital management for MSMEs, enabling smoother cash flows and financial stability.

The introduction of a new credit guarantee scheme for MSMEs, providing guarantees up to ₹100 crore for term loans without collateral, will facilitate access to finance for machinery and equipment purchases. The government’s continued focus on GST simplification and rationalization is a welcome move.

The Budget also emphasizes urban development through transit-oriented plans for 14 large cities with populations exceeding 30 lakh. This presents a promising market for the surface décor industry, as the increased real estate value will consequently lead to higher demand for construction and development.

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Jitendra Kumar Taylia

(Chairman, Echon, Udaipur)

Budget 2024 outlines a comprehensive approach that holds great promise for Echon – manufacturer of PVC and WPC doors, door frames and door skins, foam boards and sheets, and laminate flooring – and the larger PVC manufacturing industry. It encourages the real estate industry to invest in affordable yet advanced building materials.

The increase of custom duties on import of PVC will fuel the domestic industry, helping use of alternate materials that are affordable and durable over the long term. The government’s focus on renewable energy, especially solar power, is aligned with our commitment to sustainability.

I anticipate government’s intervention for introducing R&D grants and tax incentives to drive innovation in green manufacturing, simplification of export procedures to enhance global competitiveness, and an accelerated infrastructure push using domestically produced materials to support local industries.

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Govind Assudani

(CEO, IMA Schelling India, Bengaluru)

To stimulate manufacturing, this Union Budget introduces attractive incentives and schemes for the furniture industry, including subsidies for technology upgrades, research and development investments, and incentives for setting up manufacturing units in designated industrial zones.

In line with supporting MSMEs the Budget outlines specific initiatives that encompass easier access to credit through streamlined banking processes and enhanced lending facilities tailored to the needs of smaller enterprises. Additionally, simplified compliance procedures and reduced regulatory burdens are proposed to improve the ease of doing business.

The Budget addresses import-export dynamics crucial to the furniture industry: streamlining customs procedures, reducing import duties on essential raw materials and components, and facilitating smoother export processes. Such initiatives aim to make Indian furniture products more competitive in global markets while reducing input costs for manufacturers.

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Suresh Balakrishnan

(Executive Director, Leitz Tooling Systems India, Bengaluru)

The Budget is neither big-bang nor populistic, but the emphasis has been on steady consolidation and appears pragmatic, utilising the tail winds of 8.2% GDP growth, a continuing boom in tax receipts and a bumper dividend from the RBI. There are no radical reforms and the budget focuses on education, employment generation and skilling, and a steady capex push in infrastructure.

The flurry of measures for boosting infrastructure, housing and the MSME sector is likely to be beneficial, especially the ₹11.1 lakh-crore allocated for infrastructure with 12 industrial parks sanctioned under National Industrial Corridor Development Programme, and further investment-ready ‘plug-and-play’ industrial parks to be developed in about 100 cities.

The construction of two crore houses in the next 5 years will galvanise the woodworking industry, especially in respect of construction including doors, windows, furniture, interiors, kitchens and wood-based panel products. Abundant availability of plywood, MDF, particle boards, etc. will facilitate the development of furniture manufacturing within the country.

To help the woodworking industry find its feet, a modicum of government support is required by way of reducing duty on import of quality timber and increasing duty on import of particle board/ MDF and similar finished products. Easing the current norms for licensing and transport permits for movement of agro-forestry timber will also go a long way in nurturing the industry.

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