Budgeting for Growth

From enhancing the ease of doing business, to creating a conducive environment for new-age companies, with a focus on rural growth and infrastructure creation the new Union Budget for 2019-20 ticks several boxes.

Here is a quick recap of the highlights and an analysis from the desk of the Group Chief Economist -

Finance Minister Nirmala Sitharaman, presented a ‘mega investment-oriented’ budget with a blueprint to transform India's economy by 2025. This will be achieved by setting up a Credit Guarantee Enhancement Corporation, enhancing the source of capital or infrastructure financing and easing the norms for Foreign Direct Investment (FDI).

Anand Mahindra, Chairman, Mahindra Group, said, “Instead of lowering Goods and Services Tax (GST) on all cars, Nirmala Sitaraman aligned with the vision for mobility & incentivized only Evs. In fact, the budget is an accumulation of seemingly unspectacular moves that will nudge the economy onto a trajectory toward USD 5 trillion & an improved ‘ease of living.”

V. S. Parthasarathy, Mahindra Group CFO, said, “Budget 2019 has re-imagined solutions to old chronic problems. This was a ‘Governance’ focused Budget pivoting around technology, digital and enhancing the ease of doing business in India. It can prove to be a powerful catalyst for economic prosperity if the implementation is flawless and executed in near ‘crisis mode’.

Enhancing the ease of direct and indirect taxation the government has increased the threshold turnover for a lower rate of corporate tax. Currently, the lower tax rate of 25% is only applicable to companies having an annual turnover of up to Rs 250 crore. This has now been expanded to include all companies with an annual turnover of up to Rs 400 crore.

Aadhar card and PAN will be interchangeable and a scheme of faceless assessment in electronic mode involving no human interface will also be launched this year.

In order to incentivize and give thrust to the Electric Vehicles (EVs) sector, customs duty on specified parts required for the manufacture of EVs has been brought down to nil. In addition, there is already a proposal before the GST Council to reduce the GST on e-vehicles from the present 12% to 5%.

The Budget also focusses on transforming rural lives by setting up 100 new clusters for traditional industries, 80 Livelihood Business Incubators to develop agro-rural industry sectors, the formation of 10,000 new Farmer Producer Organizations to ensure economies of scale, and expansion of Swachh Bharat Mission to reach every village in India.

Mahindra’s Group Chief Economist desk reviewed the Budget saying, “ The Budget eschewed the temptation of a big spending splurge because it lacked the room to do so. The government has imparted an Infra thrust by significantly focussing on national grids for water, power, gas, internet, and aviation apart from transportation. Financing the fiscal deficit from abroad, however, can be a double-edged sword especially for countries running twin deficits.

V. Ravi, Executive Director and Chief Financial Officer, Mahindra Finance, said, “The positive reference made by the Finance Minister about NBFCs as an important growth lever by contributing to improved consumption and capital formation, will go a long way in reinvigorating the SME sector. The NBFC industry would have been glad to see the formation of a refinancing body which would address the liquidity stress created by certain entity-specific events that tend to affect the sector as a whole.”

Sustainability Wins For Igatpuri Plant

Mahindra’s Igatpuri plant won the ‘Sustainable Factory of the Year Award’ and ‘Jury award for Zero Waste to Landfill’ at the recently concluded India Sustainability Leadership Summit 2019 in Mumbai. The summit jointly organized by Frost & Sullivan and The Energy and Resources Institute (TERI) drew key thinkers and business leaders who have delivered and continue to deliver strategies, ideas and solutions for a sustainable business and are establishing a roadmap toward holistic development globally.

The Sustainability 4.0 Award recognizes and honors the efforts made by companies who actively integrate sustainability principles into their business culture. This year, the Sustainability 4.0 Award assessment model comprised four major parameters (People, Planet, Purpose, and Partnership) and 13 sub-parameters.

The Mahindra Group has adopted ‘No Waste to Landfill’ as a cornerstone of its Sustainability Framework. The team at Igatpuri has been the first off the blocks in this regard.

Actions taken by the plant include reprocessing grinding mud to recover metal, oil and carbon black, recovering energy by incineration of cotton waste, replacing wood and cardboard with returnable packaging, converting food waste to bio-energy and using treated canteen wastewater for gardening.

Vijay Kalra, Chief of Manufacturing Operation, M&M Ltd., said, “Sustainability 4.0 is a very comprehensive assessment framework which includes assessment in the areas of environment, social and economic performance of the organization. The assessment process was in-depth and we received a lot of insights as well as identify areas of improvement which will certainly help us progress to the next level of excellence.”

Millions and More

Mahindra has just rolled out 1 million vehicles from each of its three manufacturing plants in Chakan, Zaheerabad, and Haridwar. With this, the three facilities have joined the Company’s plants in Nashik and Kandivali, in achieving the one-million-unit production milestone.

Rajan Wadhera, President – Automotive Sector, Mahindra & Mahindra Ltd., said, “This achievement is a significant moment in Mahindra’s automotive journey. It tangibly demonstrates our spirit of accepting no limits and the relentless effort put in by each of our people across the three manufacturing facilities. We are committed to the Make in India initiative and this 1 million vehicle roll-out across three different facilities is a fine example of our manufacturing excellence and operational efficiency.”

Vijay Kalra, Chief of Manufacturing, Automotive Division, Mahindra & Mahindra Ltd., said, “The state-of-the-art facilities and lean manufacturing processes at Chakan, Zaheerabad and Haridwar played pivotal roles in achieving this production milestone within our planned timelines. I am sure that this achievement will be a stepping stone to many more accolades for all our plants in the future”.

The Chakan plant is a 320,000 units per annum greenfield facility accredited with the latest ISO 9001, ISO 140001 and OHSAS certifications. Operating since March 2010, it manufactures a range of vehicles, including SUVs, trucks and construction equipment.

While Mahindra’s Haridwar plant, which went on stream in December 2005, manufactures four models and 44 variants, the Zaheerabad plant, set up in 1985, produces UVs, three-wheelers, LCVs, and the Jeeto mini-truck. All the three plants are fully equipped manufacturing facilities with press shops, body shops, CED lines, paint shops, and assembly lines.

Boosting Cyber Security

Tech Mahindra has entered into a strategic partnership with one of the most trusted brands in cybersecurity, SSH.com, to deploy innovative cybersecurity solutions and protect enterprise businesses from unforeseen security breaches.

Rajiv Singh, Global Head of Cybersecurity, Tech Mahindra, said, "We are pleased to be partnering with SSH.com to accomplish our shared vision of assisting our customers with future-ready solutions to secure their digital assets and providing them with 24x7 global managed services. The industry-leading solutions by SSH.com (UKM and PrivX) are a natural fit to Tech Mahindra’s cybersecurity offerings that answer today’s security issues, especially across large enterprises for their privileged access management needs.

The global gold standard for secure remote system administration, the SSH.com protocol, also known as Secure Shell, refers to a cryptographic network protocol and is a method for securing remote login from one computer to another. It is being widely used by data centers and large enterprises to mitigate security risks that could hamper growth as part of their digital transformation journey.

Sami Ahvenniemi, Chief Customer Officer, SSH.COM, said, "We are excited to work with Tech Mahindra to bring UKM and PrivX to an even wider audience. Tech Mahindra’s strong footprint across 90+ countries, coupled with its subject matter expertise in cybersecurity, will provide SSH.com with a sustainable competitive advantage, thus improving our ability to scale rapidly, help customers prevent cyber-attacks and achieve compliance."

Mahindra part of ‘Great Places To Work 2019’ List

Mahindra Finance, Mahindra Rural Housing Finance, the Automotive & Farm Equipment Sector, and Club Mahindra have made it to the prestigious 'India’s Best Companies to Work For – 2019’ list.

In India, over 600 organizations applied to the Great Places to Work® Institute to undertake the assessment this year, making it the largest study in the space of workplace recognition. Their globally validated framework is considered the Gold Standard in workplace culture assessment and is endorsed by over 10,000 organizations in more than 58 countries across the globe.

Every organization is assessed in two parts – an employee survey and people practices assessment. Through a proprietary framework, the Trust Index© survey is used to survey the employees on the 5 dimensions of a great workplace – Fairness, Respect, Credibility, Pride, and Camaraderie. People practices implemented in the organization are then assessed through the Culture Audit© process which covers 9 distinct practice areas of great workplace culture.

Today, businesses depend on more than just financial capital or plant and machinery to create value for their diverse stakeholders. Employees and the environment are significant factors, as are governance and the relationship with vendors, suppliers, the community in which businesses operate, and the society at large.

A business's ability to sustain value over the long-term depends on how it manages, utilizes and integrates all these tangible and intangible resources. According to research, companies that maximize all employees’ human potential regardless of their gender, race, age, and other personal characteristics achieve three times the revenue growth compared with companies that are less inclusive.

By building the workforce through practices and policies that nurture talent, foster stronger bonds and create future leaders across businesses, the Mahindra Group is creating workplaces that are great not just for some—but great for all.

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