The Union Budget for the fiscal year 2023-24 will be presented in Parliament on 1 February by Finance Minister Nirmala Sitharaman, and the clock has already started ticking.
The retail industry has a big wish list for Budget 2023 and retailers in the country express their hopes for the industry ahead of the Budget.
The consumer durables and electronics industry is optimistic about the prospects of the sector and is seeking some measures to push the growth further from the Finance Minister.
“The Union Budget 2023 will play an important role in bringing the white goods sector on track, amidst geopolitical uncertainties and rising inflation. Strategic actions to strengthen the manufacturing in India will be essential to maintain the current trajectory of steady economic growth in the country,” said Satish NS, President, Haier Appliances India.
“The PLI scheme should continue forward which will push ‘Make in India’ ahead. And as we move towards the summer season, we expect some relaxation in GST for air-conditioners from the upcoming Union Budget 2023,” he added.
The country’s eco system for LED TVs and Washing machines has already started to develop. However, Sharan Maini, Director, Veira Group believes that, “If PLI schemes are extended to these 2 products, the ecosystem for complete product manufacturing will develop faster and will in turn help to compete globally.”
Open Cells that are not manufactured in the United States should not be taxed. He believes that the GST on LED TVs larger than 32″ should be reduced as well.
“These adjustments will boost the product’s demand, promote domestic production, and improve exports too. Schemes from the government are expected to push consumers towards more energy-efficient LED TVs & replace existing CRT TV homes,” he added.
The e-commerce industry in India has managed to gain substantial growth owing to a rapid increase in internet user penetration, and greater demand for easy access to goods & services among consumers from all walks of life.
“Budget 2023 gives our visionary government an opportunity to put our MSMEs in the fast lane, building on its proactive efforts to transform the small business economy,” said Vidit Aatrey, Founder & CEO Meesho.
He said that the government can bolster working capital for e-commerce suppliers by lowering GST on input services like logistics and facilitating refunds of accumulated input tax credit.
“Expediting the implementation of GST relaxation norms for small online businesses will allow millions of them to realise their full potential,” he said.
“With the National Logistics Policy bringing down costs for the ecosystem and strengthening distribution networks, the government could leverage the unmatched reach of India Post and Indian Railways to help our MSMEs meet rising e-commerce demand from small towns and villages in a fast and reliable manner, thereby boosting their competitiveness,” Aatrey said.
Ajoy Thomas, Vice President and Business Head (Retail, E-Commerce, Logistics and Transportation), TeamLease Services said that, “The e-commerce sector should be looking for an impetus to digitization and incentivizing digital transactions in the upcoming Union Budget. I also hope that the government cuts the corporate tax rate across the board to spur growth.”
“To amplify the make in India initiative, now is the time for the government to encourage product companies by introducing incentives which help them become globally competitive and take product innovation to the next level,” he added.
Kapil Makhija, CEO Unicommerce said, “With e-commerce continuing to grow in India, we hope to see more initiatives that encourage the adoption of e-commerce among MSMEs. For example, if the government provides tax incentives or credit benefits to sellers joining platforms like ONDC, it would greatly promote e-commerce adoption among small and medium sellers.”
In the last budget, the government announced focused initiatives such as PM Gatti Shakti and the National Logistics Policy to solve India’s infrastructure challenges and emphasise on proper connectivity, he said.
“We hope to see a continuing emphasis on policies that help build physical infrastructure and help digitalization of the logistics industry through greater integration of technology. This will boost the efficiencies across supply chains and will enhance the growth of the retail sector in the country, he added.
The logistics business is one of the pillars of the Indian economy, which has seen tremendous expansion in recent years. With the advancement of logistical infrastructure, the industry is experiencing a major increase in demand generation, resulting in employment creation.
“The expectations from the budget for the financial year 2023-24 are introduction of more supporting initiatives from the government such as further infrastructure projects along with focus on completion of ongoing road/highway projects, digital transformation and to create a skilled workforce and related platforms for the logistics and transportation segments,” said T. A. Krishnan, CEO and Co-founder, Ecom Express Limited
“We can expect Budget 2023-24 to be taxpayer friendly with focus on maximum disposable benefits. There is a dire need to consider reduction of excise/VAT on energy and fuel products such as motor spirit, high speed diesel, natural gas, crude oil along with enhancement of tax deduction limit to help lower income groups,” he said.
Krishnan says that this will help to cut down logistics and transportation costs to a great extent.
“For a growing economy like India, it is important to reduce logistics costs to boost export competitiveness at a time when global firms are moving their manufacturing facilities to India to de-risk global supply chains,” he said.
“The industry also expects that the assessment process for GST returns should be improved across states to enable smoother operations. Currently, demands are coming in for frivolous reasons, leading to unnecessary appeals/litigation,” he stated.
The FMCG sector is a major contributor to the GDP and is expected to grow at 10-12 per cent during the current fiscal year. There are nearly 3 crore employees in this industry, which makes up about 5 per cent of all factory employment.
Currently, urban spending on FMCG products stands at 64 per cent and rural spending at 36 per cent.
Balasubramanian A, Vice President and Business Head – Consumer and Healthcare, TeamLease Services said, “The Aspirational Districts program and credit extensions for micro, small and medium enterprises will also help in boosting rural demand.”
The Union Budget need not directly address FMCG as a sector. Fiscal policy, infrastructure, or development initiatives that put more money in people’s hands are likely to positively affect the consumption of FMCG products, he said.
“For quite some time now, people have been expecting reductions in tax rates, increases in tax slabs, and increased exemptions under various sections of personal tax in the budget,” he said.
“With the support of various infrastructure initiatives outlined above and a boost in rural incomes via MSPs, MNREGAs, DBTs, etc., there will be significant enhancement in rural employment and income growth,” he added.