What the Indian security market expects as Modi returns to power

In May this year, the National Democratic Alliance (NDA), led by the Indian Prime Minister Narendra Modi’s Bharathiya Janata Party (BJP) came back to power with a landslide victory. Since his first term, much has been said about Modi’s business-friendly approach and potential to boost the economy. Now that he has returned to power, there is even more speculation on what the industry can expect.

What the manufacturers say

“The National Democratic Alliance (NDA) has received an unprecedented mandate in the recent elections, this has aroused huge expectations from Modi 2.0 government to bring about major policy changes to promote the cause of the security industry,” said Ashish Dhakan, MD and CEO at Prama Hikvision India. “It can help the security industry by implementing industry-friendly policies on research and development, technology innovation, incentives, tax sops, GST, Make in India [initiative], standards and policy framework.”

Dhakan added that the government has shown a strong intent and firm commitment in the first 50 days of governance to deliver on those promises in a visible and time-bound manner. It has set a goal of making India a US$5 trillion economy by 2024.

What is expected

The most anticipated development in the country is more work on smart cities. This was a major promise from the Modi government in the first term, and experts believe work on this to continue at a rapid pace in the coming five years.

“The government has shown its long-term commitment to the Smart City Mission and ‘Make in India’ program,” Dhakan pointed out. “The government needs to speed up the implementation of these two flagship projects by identifying the policy and resource-related challenges. The GST rate on security and surveillance products needs to be lowered further to promote the cause of the security industry and citizen.”

 

Dhakan further added that according to the Ministry of Housing and Urban Affairs data, currently all the 100 cities selected to be Smart Cities have established their Special Purpose Vehicles (SPVs), constituted their City Level Advisory Forum (CLAF) and appointed PMCs, indicating that all these smart cities are in “Mission mode”.

Also, Integrated Command and Control Centers have become operational in 15 cities. This has resulted in enhanced efficiency in governance, management of traffic, law enforcement, improved citizen grievance redressal and reduced criminal incidents on city streets and public spaces.

Solution providers are also keen on the government coming up with stronger privacy and data protection laws. Sudhindra Holla, Sales Director at Axis Communications India & SAARC said that with the government investing heavily on R&D centers, there should be more focus on making the personal data protection bill more transparent and provide greater flexibility to the cybersecurity framework. 

New projects coming up

The Smart City Mission and safe city projects are getting a major boost from the government. These two are expected to be the key drivers of growth in the Indian security market.

“The government has taken some bold steps to revamp homeland security, urban transportation (metro rail, railway & BRTS), education and critical infrastructure verticals,” Dhakan said, adding the smart cities initiative is finally showing progress on the ground with 897 projects worth Rs. 14,847 crores (just over $2 million) being completed.

“Closely monitored by the Prime Minister’s Office (PMO), the mission has seen a complete turnaround since June 2018,” Dhakan noted. “The mission was launched by Modi on June 25, 2015. The number of projects completed has seen a quantum jump of 182 percent over one year.”
The government has also taken special initiatives for the security of women. Nearly $581 million has been sanctioned for various women’s safety projects.

“According to a Home Ministry document, the largest fund of Rs 2,919.55 crores (just over $13 billion) has been sanctioned for the 'Safe City Project' being implemented in eight cities -- Delhi, Kolkata, Mumbai, Chennai, Hyderabad, Bengaluru, Ahmedabad and Lucknow -- to provide safety for women in public places,” Dhakan explains.

Thoughts on budget

Post the elections, the government had come up with an interim budget, which gave emphasis on infrastructure projects and the digital economy. Commenting on this, Holla said that such decisions augur well for the industry.

“The Union Budget 2019 depicts the milestone set towards reaching a $5 trillion economy by investing in infrastructure, digital economy and job creation through Make in India,” Holla said. “It brings us one step closer to the economic growth as part of the five years plan with a renewed focus on infrastructural development by allocating budgets for roads, ports, infrastructure, smart cities, aviation, and logistics.”

Holla also appreciated the government’s focus on the construction and development of highways and investments in rail.

“With this, we expect a growing demand in video surveillance installation in the new infrastructural corridors to curb crimes and secure the highly sensitive zones,” he said.  “With the smoother implementation of GST, there will be a further boost of doing business in the country.” 

However, there have been some concerns after the budget sought to increase duty on imported surveillance cameras. Hinting at this, Holla said he would like to see a renewed focus on reduction in import duty till Make in India initiative is feasible for vendors like Axis.

“Being a vendor company, we would like the government to fortify measures on enforcing guidelines for quality and cost-based selection (QCBS) while choosing the vendors,” he said.