The size of the Indian market is the biggest opportunity for a manufacturer. The Budget has prioritised important sectors of the economy such as agriculture and healthcare, which directly benefit poorer households. As the aspirations and spending power of low and middle income segments grow, so will the need for homes and offices, cost-effective space-saving furniture, and thereby furniture fittings.
While the IT industries have encouraged large scale office furniture manufacturers, the kitchen, bed and wardrobe industries have great scope for bulk manufacturing in India. Today, we do not have a reasonably-sized sofa manufacturer. As affordability grows in rural and middle class households, these industries will pick up. We have several products that make it possible for the middle class to live comfortably, especially when space is at a premium. Our fittings enable a 96-square foot dwelling space to have a wardrobe, folding-bed, folding dining table, study-table and a mini kitchen. As the market is able to afford basic furniture, volumes of these products will grow.
Corporate tax reduction to 25% should have been across the board irrespective of turnover. Larger companies invest, expand and create more jobs with savings in taxes. Larger companies are able to produce volumes more efficiently, bringing down the cost of production for items such as basic furniture and fittings, making these more affordable. The increase of import duties on furniture fittings will protect local manufacturers. However, there are no concrete steps taken by the government with respect to labour market reforms. Manufacturers will hesitate to hire freely.
Considering steps such as demonetisation and GST in the preceding financial year, this budget is sensitive to the critical areas which need to be addressed in the future. How these plans are funded remains a question as there are insufficient provisions in the Budget.