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Union Budget 2022: Did it stand up to the expectations of the retail industry?


Finance Minister Nirmala Sitharaman on February 1 2022 presented the Union Budget for the financial year 2022-23, which got a mixed response from the sector.

Here’s how prominent retailers and brands from across segments reacted to the announcements made by the Finance Minister: 

Sachin Jain, Managing Director, De Beers India

“We are pleased with the budget announcement for our sector, particularly the reduction of customs duty on cut and polished diamonds from 7.5% to 5%. This will spur greater demand for natural and real diamonds and also give an opportunity to diamond companies to boost operations and, in turn, contribute to greater economic growth for the nation. The proposal to create a simplified regulatory framework to enable the use of e-commerce channels to export jewellery will help us seamlessly take forward our initiative to promote trade through the digital mode. This will bring down transaction costs and save time while enabling us to reach out and expand our customer base globally. Overall, we hope that the gems and jewellery sector continues to plays a pivotal role in the growth of the economy ”

Nivedan Churiwal, Managing Director, BSL Ltd.

“The Finance Minister presented a positive and growth-oriented budget which was overall on expected lines. No major tinkering has been done and major impetus has been given to the startups and reduction in taxation on digital assets is also a step in the right direction. The budget has tried to encompass all segments of the society with a focus on rural housing, MSP direct payments and Rs. 2.00 trillion outlay for MSME. The Gati Shakti master plan will give a massive boost to the rail and road network in the connectivity in the country. Overall, the Government is taking the economy ahead in the right direction.”

Suvankar Sen, CEO, Senco Gold & Diamonds

FM’s announcement of reduction in customs duty on cut and polished diamonds and gemstones and plan to develop a simplified regulatory framework to facilitate export of jewellery through e-commerce are positive steps which will enable the sector to grow in the country and boost exports.  We look forward to its implementation later this year. The reduction in import duty on diamonds will help generate increased demand for diamond jewellery in the market. Overall the focus on investment in infrastructure is positive for the economy, also the review of Special Economic zones Act will help boost the export infrastructure.”

Adhvika Agarwal, Co-founder, ORCO (Organic condiments and spices)

“We are very excited with the announcement of initiatives like Kisan Drones by our Finance Minister as a part of the Union Budget 2022-23 to promote chemical-free natural farming. This will really help push the Organic Foods Industry of India and support startups like ours who are trying to bring a sustainable change in the eating habits of India and gradually move towards the organic way of living. We hope this will help us and all other organic brands prosper.”

Farman Beig, Co-founder & CEO of Wat-a-Burger

“The government has been supportive towards the F & B sector and did announce some steps to help the sector bounce back by shifting the GST compliance onto online food delivery partners on behalf of the restaurants. However, some relief in terms of ITC (Input tax credit) would have further catalysed the recovery of the sector which otherwise is on the bleeding end. Currently, when the industry is struggling to manage the fixed cost with GST, it requires immediate boost, and cutting down ITC would have worked wonders.”

Ahmed ElSheikh, President, PepsiCo India

“Reviving economic growth, increasing consumption, and fostering investment to fuel post-pandemic growth have been key objectives for the government, and the Union Budget 2022 reflects this very intent. This year’s Union Budget lays forth a vision for India in 100 years. The Government is leading from the front by raising public sector spending to keep the economic recovery on track. Digitization combined with infrastructural creation will accelerate economic development, stimulate innovation and entrepreneurship, enhance living standards while keeping sustainability at its core. The increased outlay for PM Gati Shakti projects for multi-modal connectivity including 100 new railways logistics hubs coupled with steps like enhancing local oilseed production, extending the last date for starting production for new manufacturing units, encouraging alternate cropping will aid growth of the FMCG sector and further strengthen Govt’s vision of an Atmanirbhar Bharat.”

Shriya Naheta Wadhwa, Founder of Zama Organics

“Also Government’s reemphasis of minimum government and maximum governance model with reduction of overlapping compliances with initiatives such as National Digital Health Ecosystem, setting up digital banking units and introduction of Unified Logistics Interface Platform shal significantly improve ease of doing business in the country.

“We applaud Budget 2022 for bringing in a considerable focus on clean eating and sustainable farming with impactful steps announced in this direction. Incentives to farmers, MSMEs to adopt natural farming will encourage increasing numbers of stakeholders to look at entering organic farming space as a highly lucrative opportunity, giving a much-needed boost to the ecosystem in distress. The decision to involve education and training in organic farm practices is a step in the direction to set a strong foundation, with more talent right from entrepreneurs to farmers coming with advanced knowledge to further elevate the existing system. An applause-worthy step among the many positive decisions is Fund to be facilitated through NABARD to smoothen financing of startups in the ecosystem to beat agrarian distress is a great promise which will help reduce uncertainty for startups and attract sophisticated tech-based competencies. Additionally, focusing on warehousing and transportation to help the faster movement of supplies will aid in supplying fresh produce and uplift the larger goal of organic farming. A multi-fold approach was much anticipated and as players, in the ecosystem, the future looks promising”

Porus Doctor, Partner and Consumer Industry Leader, Deloitte India

“India’s economic growth in the current year is estimated at 9.2%, the highest among all major economies. The Government has announced an INR 6,000 crore program to support MSMEs over the next five years. The increased focus on employability and e-skilling will go a long way to support the MSME sector and revive industrial activity. Production Linked Incentive (PLI) Scheme for achieving Aatmanirbhar Bharat has been extended to 14 sectors with a potential to create 60 lakh new jobs. The government is also promoting digitization of the economy by announcing schemes to promote affordable broadband in rural areas. This will give a boost to the e-commerce sector. Ease of Doing Business (EoDB) 2.0 is a step in the right direction and Single Window clearance mechanism will go a long way in improving EoDB in India and making India a more investment friendly destination.  In addition, until such time that private consumption and private capital expenditure pick up steam, the government spending on capital expenditure which has been increased by 35.4% to INR 7.50 lakh crore in 2022-23 from INR 5.54 lakh crore in the current year will have to play a huge part.”

Utkarsh Gupta, Managing Director, Ramagya Mart.

 “This budget presented is overall growth- oriented with a clear focus on digitization,  infrastructure development and ease of doing business. With digitization and technology being given a central place in the budget by our Finance minister, e-commerce as an industry will be positively impacted for exponential growth.

The reduction in surcharge is an evolving step by the government and the 2022-23 Budget is a terrific push by the government for start-ups and tech firms. It seeks to democratize technology with a concerted thrust towards digitalization.

The government’s proposal of issuing a Central Bank Digital Currency (CBDC) by the use of blockchain tech will lead to faster and cheaper currency management in India. The budget has also legitimized  crypto trading by imposing a tax of 30% on virtual assets. This digital currency will give an upswing to the Indian economy, though there might be some challenges in tracking, with the lack of a primary regulator.

Let’s look forward to fiscal 22-23 being an eventful one for the Indian business ecosystem.”

D2C Market 

The D2C space is growing courtesy the learnings of the pandemic and currently more than 600 D2C brands are working in India which is contributing to India’s GDP.
Here’s how D2C brands reacted to the announcements made by the Finance Minister:

Sachin Chopra, Co-Founder and CEO, Ninety One Cycles

“The fiscal budget 2022-23 was extremely new-age as anticipated and promising for growing businesses especially within the ambit of Atma Nirbhar Bharat and Digital India mission. We welcome the Government’s revamped focus on urban infrastructure and development. We believe the introduction of town planning schemes and transit-oriented development will create a massive opportunity for e-mobility in India. The policy push towards building and improving efficiency of India’s EV ecosystem will play a crucial role in encouraging more and more consumers to adopt eco-friendly ways of commuting for both short and long-distance travel.

 Initiatives like Drone Shakti for startups and an expert committee to help attract investments, PE/VC is an encouragement for many players with the mission to expand their businesses and export goods manufactured in India to the world. In the larger context, this strengthens India’s mark on the global map and continues to be the manufacturing hub which will also boost FDI. The budget is very holistic and definitely aimed for the next 25 years as assured by honorable FM in her opening statement.

 As India becomes the third-largest startup ecosystem after the US and China, we would like to congratulate the government for the emphasis laid on ‘Ease of Doing Business’ during the past couple of years. With extension on tax incentives for startups and Emergency Credit Line Guarantee Scheme (ECLGS) until 2023, we are hopeful that businesses especially MSMEs will get the much-needed respite in registering strong recovery during the post-pandemic era.”

Harshil Salot, Co-founder, The Sleep Company

“The budget announced by the government today has been an incredibly encouraging one for India’s startup ecosystem and is an encouraging indication of the future roadmap of India’s digital transformation. As a made-in-India startup, the ECLGS 1 year extension is a great initiative that can aid SMEs to help sustain some semblance of normalcy and business momentum in these challenging times. Furthermore, the launch of the 5G spectrum can be a game-changer in increasing the speed of digital transformations across different spheres;  specifically for the D2C ecosystem that has y-o-y been making significant in-roads into India’s heartland, connecting more consumers to products and essentials that they otherwise would not have access to.” 

Tanaya Sharma, Co founder, Speaking Herbs

“We welcome the budget that has been allocated by Our finance minister. We are happy with the outcome of the budget as we cater to the MSME Industry. The Union Budget 2022-23 emphasises the MSME sector, a critical sector that makes up for about 45% of the country’s total manufacturing output, 40 percent of exports, and almost 30 per cent of the national GDP.  The declaration of the Emergency Credit Line for the MSME sector has been extended until March 2023. The guarantee cover has been increased by Rs. 50,000 crores, bringing the total plan cover to Rs. 5,00,000 crores. This is a really positive step by the honorable Finance Minister.”

Vivek Gupta, Co-founder, Licious

This has been one of the inclusive budgets of recent times. The FM announced a few tax structure changes, which is bound to bring relief to various sectors. The D2C sector gets a boost from the focus in fintech & digitization. Bringing 100% of 1.5 lakh post offices under the core banking system is a step towards improved financial inclusion. I am also hopeful that the co-investment model, facilitated through NABARD to finance start-ups for agriculture and rural enterprise will unlock more opportunities there. The capping of the surcharge on the long-term capital gains payable on financial assets, at 15 percent is good news for investors in equity shares of start-ups. In 2021 we saw a lot of activity from family offices & retail investors in the Indian market; this move will further boost the confidence of this set of investors in the public & private sector.

It is good to see an increased focus on employability, e-skilling, and employment generation in the MSME sector. ECLGs is a big positive, too.

What the budget lacked this year is impetus to improve the fisheries sector, who have been poorly impacted by the pandemic over the last 2 years. Fisheries, in India, is a multi-billion dollars export industry. We are also a significant aquaculture hub. This sector needs more meaningful inventions from the Govt. It will be great to see a boost in training, upscaling & solutioning through tech for this sector”.

Purvi Rohit Pugalia-Co-Founder, Not So Pink

 “The budget has been  extensively focused on startups and digital push which is a great thing for the e-commerce sector. Since many retail players started in the post pandemic period and have sizable operations in the digital medium, this opens up new requirements for digital skills and expertise. API based skill credentials, secure payment layers for jobs and the upcoming digital upskilling program will help empower company owners as well those looking for opportunities to be more relevant in the current climate.  While being a part of the digital ecosystem, there is no dearth of challenges for the existing startups. The announced tax redemption extension will go further along offering relief to business owners who are looking to streamline their operations and channelize their capital for scalability in the long run.”

Gopal Upadhayay, Co-founder of Teabox 

“ This year’s budget, framed against the backdrop of the 3rd wave of the pandemic, is bullish on the India growth story. Set against 4 basic pillars of PM Gati Shakti, inclusive development, productivity enhancement and investment sets a solid foundation for holistic growth of the economy. Extension of the period of incorporation for startups by 1 year upto March 31, 2023 to avail of tax incentives will provide a boost to the sector. Further, the government’s focus on promoting chemical-free farming with focus on PPP model for delivery of digital and hi-tech services for farmers is a step in the right direction to meet the needs of modern-day agriculture. Announcement of 5G spectrum auctions in this year will provide much needed fillip to internet connectivity in urban towns and cities, thereby enabling B2C companies to gain access to newer markets in the country.”