Reactions from industry captains on announcements in the current Budget that will have a bearing on retail businesses
New Delhi: Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023, the fifth budget of Modi 2.0 on February 1, 2023. In the last full-fledged Budget before the general elections next year, Sitharaman presented a budget that many consider could lead India onto the growth path of the future. Sitharaman announced major changes in tax slabs under the new tax regime that would put more money into the hands of the middle class and that brings cheers to many businesses from FMCG companies to retailers.
This Budget hopes to build on the foundation laid down in the previous Budget, and the blueprint drawn for [email protected] “We envision a prosperous and inclusive India, in which the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes,” said Finance Minister, Nirmala Sitharaman in her Budget speech.
She further added, “In the 75th year of our Independence, the world has recognised the Indian economy as a ‘bright star’. Our current year’s economic growth is estimated to be at 7%. It is notable that this is the highest among all the major economies. This is in spite of the massive slowdown globally caused by Covid-19 and a war. The Indian economy is therefore on the right track, and despite a time of challenges, (is) heading towards a bright future.”
In a series of stories, IndiaRetailing brings you the opinion of leading industry experts on the Union Budget 2023. In the fourth article of the series, we feature reactions to announcements in relation to retail, businesses in general and the economy.
Abhay Batra, co- founder and CFO, Clovia
Budget 2023 is a positive and balanced budget with a strong focus on a prosperous and inclusive India. It is encouraging to see that key pillars of growth include skilling and job creation, opportunities and reduction of compliance burden for small entrepreneurs, and the empowerment of women entrepreneurs. This is consistent with our expectations of including incentives to enable the empowerment of women entrepreneurs in tiers 2, 3, and 4.
Reduced tax burden for small entrepreneurs will mean reduced supply-chain costs and hence more competitive markets. This will help Clovia’s initiatives of incubating small and medium manufacturer entrepreneurs to build their technical expertise, develop products and create sustainable revenue streams for themselves.
The reduced individual tax burden will mean higher disposable income; this is a welcome step for the retail industry as a whole. Steps like carrying forward losses for start-ups in case of shareholding, and an extension of the date of incorporation are steps forward for the start-up ecosystem.
Aman Trehan, executive director, Trehan Iris
The government looks to vastly enhance the existing infrastructure and create a conducive environment for investment flow. This will attract more businesses, generate more job opportunities, and bolster the country’s economic growth.
Anil Pillai, director, Terragni Consulting
The budget for 2023-2024 continues on the Capital spending and infrastructure thrust. The Saptarishi focus is a good way to define priority focus areas. Given that this was a pre-election year budget, the focus on fiscal consolidation and the lack of freebies has been a welcome sign. When the globe is facing recessionary headwinds, India committing upwards of 10,000 crores in infrastructure capital expenditure is a sign of audacious confidence in the Indian economy.
Deepak Jain, founder, The Fragrance People
The ongoing make in India initiative, including lower import duties on raw resources used in electronics, cameras, TV panels, and other products, should help increase direct and indirect job creation. This will aid in the promotion of easier credit access, infrastructure development, and increased opportunities for employment benefits. Further reductions in personal taxation slabs should help increase middle-class disposable income with a multiplier effect, boosting the economy and retail sector.
Divya Malpani, founder and CEO, Skinvest
The Indian economy has gone from being the ninth largest to being the fifth largest in the world over the past years and the new budget in place along with a more formalised economy will help India move ahead even a step further.
It allows for ease of doing business and a stronger and more stable environment focused on growth. It does set the country up for a decade of startups and success. The budget is futuristic and aspirational. It extends support towards the next wave of technology and a more digitally inclined approach which can be good for the business. The extended incorporation benefits for startups will encourage entrepreneurs in the country while making them attractive to investors. The path taken can be revolutionary for India.
Gaurav Balani, DGM – marketing, Infiniti Mall
With a positive growth estimate of 7% and a change in the personal tax regime, the pulse of the budget is optimistic towards the sector. While retail and entertainment sectors are reviving, formalising digital payments, a boost of AI-driven tools and an increase in per capita income will be great catalysts to the sector and increase the spending capabilities and facilitate consumption for Retail Industry as a whole, which includes Malls.
The budget has a stronger stimulus to the middle class with an impetus to growth as well as job creation and with a staggering amount of GST collection in January 2023, the fiscal year 2023 – 2024 can bring in a steep upward trend for spending in the retail and entertainment sector.
Raghunandan Saraf, founder and CEO, Saraf Furniture
The industry was expecting a few direct SOPs, which were completely absent from the budget, particularly regarding the Input Tax Credit. However, looking at the positive aspect, the budget has increased cash flows in the hands of individuals through relaxed tax provisions…and we see this as a window of opportunity that can benefit the retail sector through increased spending.
Rajeev Sharma, chief strategy officer, Mitsubishi Electric India Pvt. Ltd.
The Budget 2023 is oriented towards the economic growth of the country. I am sure that a 33% growth in capital expenditure will result in balanced development. This is a smart move since it will help the country achieve its goal of becoming a 5 trillion-dollar economy and a global powerhouse.
I believe that the announcement of setting up 100 labs to effectively develop 5G services and the vision to promote Artificial Intelligence in overall industries is a strong step by the government. This will further lead to automation in the industries which will help in propelling India’s growth and promoting smart cities.
The union budget 2023 has come up with positive announcements for different sectors to support the Make In India initiative and can result in balanced growth in the near future.
Ritika Sharma, founder and CEO, House of Beauty/ Boddess
The 2023 budget is optimistic for women entrepreneurs with a focus on the macroeconomic stability of the youth and women entrepreneurs of the country. The National Rural Livelihood Mission has achieved remarkable success by mobilizing rural women into 1 lakh SHGs. This year’s budget further boosted the sentiment by focusing on the economic empowerment of women – a big opportunity for women-led start-ups in tier II and III cities. Additionally, the Indirect Tax proposals that aim to promote exports, boost domestic manufacturing, and encourage green energy are a positive sentiment to the Indian business ecosystem.
Sachin Castelino, chief strategy and transformation officer, In Solution Global Ltd.
Promoting digital literacy and entrepreneurial skills among artisans is essential for them to step into the e-commerce ecosystem. With Open Network for Digital Commerce (ONDC), coupled with the existing digital payment structures in place, small sellers can boost their productivity, and increase connectivity with consumers and their potential income.
Shammi Agarwal, director, Pansari Group
The Union Budget 2023–2024 offers incentives for advances in food infrastructure, research & development, and innovation, which is extremely encouraging for the FMCG sector’s modest growth. The government’s initiative to promote millet for its health benefits would increase the consumption and production of millets in the nation.
Suvendu Sahu, chief financial officer, The Body Shop India
The Green Credit Program, which will certainly encourage corporate professionals and individuals alike to their responsive action towards the environment, is an excellent initiative by the Government. The Finance Minister’s aim to prioritize adopting green fuel, energy, and building practices to reduce carbon intensity will help the citizens to build a cleaner environment for the future. This move is India’s effort to reduce the global climate crisis, and we hope it will help the citizens make a conscious choice and integrate more sustainable ways of living.
Swagat Sarangi, co-founder, Smytten
The 2023 Budget is undoubtedly a forward-looking and constructive plan for India. The rebate on the income tax limit and initiatives related to skilling and employment will encourage the youth. We welcome the government’s announcement towards easing KYC and making PAN a uniform identification for business, and it will help set up new businesses and boost the entrepreneurial spirit.
Teja Chekuri, managing partner, Ironhill India
We were hoping that in this budget, some critical issues such as the introduction of ITC (input tax credit), liquidity-focused credit lines and single window clearance for all restaurant licenses will be looked into. It would have helped if the government would have addressed the issue of unemployment in the hospitality sector and introduced healthy regulations in place to improve the ease of doing business and helped to generate employment in the sector.
Vandita Purohit, founder, TraWork
This FY budget emphasizes on the growth of the infrastructure, tourist destinations, and airports. It has turned out to be an important aspect for better connectivity and identifying cultural sites as places of tourism.
This year’s budget will not just boost tourism but also contribute to the idea of sharing our culture, history, and heritage with a larger audience. While there are many other things that can be done, this is a great start.
Vikas Jain, founder, Acviss Technologies
The new tax exemptions are going to help the salaried class. Startup tax benefits are welcome but could have been better. But reducing compliances will also be beneficial for SMEs. This can be a leap towards creating a better and friendlier environment for startups and corporates in India. The decision to give more importance to Artificial Intelligence by starting courses in top educational institutions is going to rejuvenate young minds.