HARISH RAO | Founder | sawdust.co.in | Mumbai
Harish Rao is a Chartered Accountant by qualification, an analyst by hobby and a journalist by profession. His interest in architecture and interior design moved beyond the four walls of his own home when he was asked to head an architecture monthly a decade ago. Since then, he has been keeping a tab on each and every development in the field.
Year 2016 started off well for Indian home improvement industry with oil prices ruling low and some encouraging announcements in the budget by the Finance Minister. Gas price was reduced in January which helped the tile manufacturers and in Budget 2016, an allocation of Rs 9,000 crore for Swachh Bharat Abhiyan was made which gave some boost to ceramic manufacturers. Also government’s decision to implement Pay Commission’s recommendations in totality was welcomed by the home improvement industry as it expected to result in increased cash flow in the hands of government employees which in turn expected to result in increased spending by them on home improvement.
Government’s decision to impose USD 1.37 per square metre anti-dumping duty on all vitrified tiles imported from China gave much needed relief to domestic tiles manufacturers. Passing of real estate bill in Rajya Sabha in March was also a notable milestone as the bill aimed to address the complexities of the sector by putting in place a regulatory mechanism. Further, commencement of work on 20 smart city projects was another positive news for the industry. However, biggest positive news was in the form of passing of Constitution amendment bill enabling the introduction of uniform indirect taxation system in the country, GST, which is expected to bring down the cost of transaction and also take away whatever tax advantage unorganised sector hitherto used to enjoy over organised sector. This is expected to provide level playing field for the organised sector vis-à-vis unorganised sector.
The Department of Commerce, Ministry of Commerce and Industry notified the new import policy for marble and travertine blocks which brought an end to the quantitative restriction on the import of marble and travertine blocks, and restrictive import licensing system.
However, Indian furnishing industry received biggest setback when Target Corp, a well-known retailer, announced that it would be ending all business with Welspun India Ltd, one of the world’s biggest textile manufacturers, after saying the supplier was sending it phony Egyptian cotton sheets. This is expected to have an adverse impact on India’s home textile exports in the short to medium term.
On the whole it appeared to be an year of smooth sailing for the industry till the announcement of demonetisation came in in November which threw all the calculations haywire. With cash in the hands of public becoming scarce consumption was badly affected with home improvement industry being one of the biggest casualties. Spill over effect of demonetisation is expected to continue in the first half of the Calendar 2017. However, early introduction of GST Act in the country in 2017 may help the economy to crawl back to normalcy much earlier than expected.
However, a bad news for the home improvement industry is in the form of rising oil prices which is going to adversely impact paints, mattress and insulation manufacturers. Even the tile manufacturers may see its impact in the form of rising gas price. One only hopes that the oil price stabilises soon and normalcy comes back to the industry in 2017.