With the Budget 2016 just two weeks away, expectations are running high that Finance Minister Arun Jaitley will present a budget that will drive consumption demand.

Speaking to Bloomberg TV India , Blue Star Executive Director B Thiagarajan says the Budget should exempt excise duty for 5-star and inverter air-conditioners topush up demand for energy-efficienct products and reduce green house emission requirements.

What expectations do have from the Finance Minister, especially with the home building and consumer durable industry?

Whatever reform measures are possible, we should go ahead with it. Today, we have a situation where there is no enough scale for quite a few appliances such as air conditioners. Our market size in India is around 4 million units. China is 50 million units. Global market size is around 105 million units. As you can imagine, with a 4-million domestic market size, you will not be globally competitive. Therefore, it is important the domestic market grows so that we become globally competitive. So, in this connection I would recommend we should work towards this and make air conditioners more affordable. It is not necessary that they need to do it for all types of air conditioner. For high energy-saving conditioners such as 5-star and invertors, the industry has been asking for a zero per cent duty. And, this is something that is supported by the Ministry of Power as well as the Bureau of Energy Efficiency. So ,we expect the Finance Minister to consider this request and exempt excise duty for 5-star and inverter air-conditioners. Then, people can afford more higher energy-efficienct products and in the process the market grows. If the market grows, the price level will come down. This will serve the purpose of domestic growth, affordability, as well as the green house emission requirements in the sense that the nation will become more energy efficient.

You are speaking about the need for scale. How can Make in India and some of the other government initiatives and programmes help the domestic industry reach the kind of scale that it needs to compete on a global level?

If the scale is built, then Make in India will happen. The import dependence will reduce. So, as an Indian company, we are interested that more and more products should get manufactured in India. On the coal chain sector, there have been reforms all along. Many concessions are being made, including the Cenvat and import duty exemption for the fresh fruits and vegetables. But, the sector is yet to take off. The other requirement is, zero per cent duty does not help, because in the GST regime the zero per cent duty will not be effectively reaching the end consumer. In the next stage, he will not be able to take the set-off. So, we have been asking a duty drawback scheme. And, there again the government priority should be to grow the coal chain infrastructure in the country. So to sum up, I want the Budget to be growth- and reform-oriented, which will help build scale in the country for domestic products. Secondly, it should become affordable so that the consumption levels go up. Then only will the Make in India program come to reality. On the other hand, if more and more manufacturing is going to take place, then employment generation will improve. I think manufacturing and agriculture are two sectors, which can generate most of the employment.

How do you look at improving market share in this market? What are corporates like you doing to capture the demand is out there?

We have for the past five years, grown faster than the market. So, we will reach a market share of around 10.5 per cent this year. Our intention is to reach the market share of 12 per cent in the coming year. More than 50 per cent of our sales come from Tier-III, Tier-IV and Tier-V markets. These are markets where there is aspiring population and those driven mainly by the agriculture economy. Employment generation is important for money to flow back into the rural market. We will build the brand extensively. Significant investment will also be made in Tier-III, Tier-IV and Tier-V markets.

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