Expectations from Union Budget 2022-23

HVACR sector in general is made up of industry professionals from many different sectors. It felt vulnerable to disruption business activities due to pandemic which dented world economies globally.

Many things changed and what the human learnt was a greater emphasis on indoor air quality, sensing need of healthier indoor environment and understanding the hygienic ways of living. Pandemic challenges also showed the importance of digital collaboration stressing virtual connectivity. Ventilation category saw utmost innovations and globally nations are confronting climate change and decarbonisation of the buildings. So transition to new normal and enhancing awareness has become part of industry revival and survival as a whole. Hence, HVACR sector expects new opportunities and positive outcomes expecting many positive expectations from the budget 2022 to be presented on February 1st, 2022.  

“My expectations from the budget are as follows: Clear identification of incentives or benefits in terms of tax reduction to small and medium industry (which forms over 70 percent of the Indian industry), on adoption of sustainable technologies, and energy and water efficiencies. There is a need to provide clear tax benefits to reduce energy bills – irrespective of the technologies adopted. Encouragement to start-ups and SMEs in the energy and thermal storage sectors, by offering them greater benefits for R&D spends, such as income tax breaks, even if they are not recognised by DSIR (Department of Scientific & Industrial Research, under the Ministry of Science & Technology). India needs to develop India specific technologies and this can happen only through increased R&D spending across the board. Grants by DST (Department of Science & Technology, under the Ministry of Science & Technology)need to be given directly to the industry and the industry should then partner with academia, and not the other way round which is being done currently. Unless grants result in products that benefit people at large it will not further research by industry.” – Samit Jain, Managing Director, Pluss Advanced Technologies.

“As India stands at the precipice of rapid growth post the pandemic with its green restart strategies, all eyes are set on the manufacturing sector to spearhead this growth and the move towards sustainability. The outlay from the 2022 budget, I believe, should set the pace of growth for this decade, and pave the way for India to reach its ambitious goal of becoming a $5 trillion economy by 2025. The PLI scheme introduced in 2020 served as a gamechanger for many industries that were hitherto hesitant to invest in new technologies due to the high cost of capital. Going from strength to strength should now be our focus, by way of addition of more sectors within the scheme to boost capital spending. This will invariably help build a resilient ecosystem for these sectors that will bolster our overall growth. A concerted effort on ensuring that these schemes subsidise the right benefactors, is also crucial in helping facilitate the ease of doing business in the country. An increase in budgetary outlay towards healthcare, particularly in developing infrastructure surrounding the healthcare sector is a necessity evident from our pandemic learnings. Better indoor air quality, green comfort and energy efficiency in hospitals, smart precision cooling for pharma & lab facilities, fresh & safe food & drink etc. will be important as our growing population faces new challenges in coming years. With the country’s fight against Climate Change including the recent ratification of the Kigali agreement and our strong position on adopting sustainable solutions in the HVAC sector, it is crucial that the 2022 Union Budget provides the industry with increased budget allocation to develop sustainable cooling solutions and well-connected cold chain infrastructure across the country. The additional funds will also help create training programs for various industry stakeholders to promote the research, production and use of natural & low GWP refrigerants that can contribute to India’s self-sufficient green economic growth. The 2022 budget must also look at incentivising recyclability of manufactured goods which helps promote circular thinking. Renewable energy and decarbonization incentives along with recyclability incentives can collectively help India get closer to its net zero goals. Overall, India’s development proposals in all sectors should be planned with sustainability at its core, to ensure a better tomorrow for our future generations.” – Ravichandran Purushothaman, President, Danfoss Industries Pvt. Ltd.

“The India Financial Budget released by the end of March each year is an annual exercise in balancing income, expenditure and deficit – but based on national priorities and policy. In respect of looming climate change caused by fossil fuel generated electricity, vehicular emissions and building energy inefficiencies – coupled with the rising demand for development and energy as well as poor air quality, India has to tackle all 3 at the same time viz., decarbonisation, rising energy demand and air pollution. This is a huge challenge as they work against each other. Renewable energy, drastic reduction in building connected loads and mitigation of urban air pollution are committed national priorities. All stakeholders down to consumers and citizens must own responsibility as well as should share in this cost. There is no other easy solution. Global grants are unlikely to be forthcoming as they have not so far- even after the Paris CoP 25. Grants are less likely even after Glasgow’s CoP 26 also, where India promised decarbonising to net zero and raise renewables in given time frames. Another big push is for Make in India and the active PLI scheme (productivity linked incentives) granted to manufacturers. Where will all this money come from! From the consumer and tax payer of course. All the above action has to begin NOW – and the path is through the budget of taxes and incentives. I forecast several new taxes on imports, raised taxes on air conditioners and incentives for make in India as well as renewable generation and application. The budget may be gentle in a year of state elections but I believe the Government must take bold steps to generate income to fund the transformation – whether by higher taxes or by long term loans from international funding institutions. I welcome bold budget moves as the threat of environment destruction is far more catastrophic than a short term tightening of our individual and collective belts. Half our population owns just 2 percent of our national wealth and just 1 percent owns 47 percent of our wealth. Economics says it’s time for the upper and middle classes to pay for ‘environment restoration’.” – Vikram Murthy Director, Univac Environment Systems Pvt. Ltd.

“We expect there is downward revision in GST rates for HVAC&R products and systems. HVAC can not be called luxury products/systems. It has become a necessity for many in our society. To make it more affordable, the government should look at the GST reduction. HVAC should not be restricted to air conditioning. HVAC plays critical role in 

• Managing life safety in commercial buildings 
• It helps in maintaining indoor quality which directly helps in the health and well being of many. 
• It helps to maintain the right conditions in hospitals (ICU,OT), pharmaceutical processes, and various security and safety related processes. 
• HVAC plays a critical role in data centre cooling which is extremely critical for information and communication technology. 
• Refrigeration plays an extremely critical role in food processing and various other industries. 

HVAC is another sector which employs a large section of young minds across the country. Looking at the above , there should be some thought on reduction in GST. The role of HVACR in these critical and new normal situations is extremely important. There are enough opportunities available in indoor air quality, health care and mass transport systems like Metro and high speed rail systems. Another sector which is growing is data centres in India. Data Centre cooling needs are rising with many data centre projects coming up in India. Refrigeration is key with the food processing sector growing at an accelerated rate. Though there is decline in the commercial segments like Office complexes. IT offices, Hotel, Mall and Entertainment sectors, the other sectors mentioned above provide a lot of opportunities for HVACR. With atmanirbhar initiative, HVACR companies can start manufacturing many items which were and are currently sourced from other countries including China.” – Ajaj kazi Project Director, Voltas Limited.

How the industry needs to play a proactive role and continue to support and feed the industry. There is an impending reform needed for the industry as pandemic also has become a trend and survival of human life is important. There is a need to connect, collaborate and come collectively to provide healthier horizons for the present and future generations alike. Despite challenges enforced by pandemic HVACR industry stands united to realise the hot trends and issues such as energy efficiency improvement and emissions reduction.