2023 Union Budget: The Retail industry’s reaction to the Budget
Nirmala Sitharaman, Finance Minister, presented the Union Budget 2023. This was the Modi government’s final full budget before the general elections. The budget introduced to the public by the Finance Minister is centred on long-term social and infrastructure development. The budget recognizes the importance of empowering multiple segments of the community and the economy.
Given that India is expected to be one of the world’s fastest-growing economies in the coming fiscal year, the budget has placed a strong emphasis on inward investment.
The government’s renewed emphasis on uplifting the MSME sector with the credit guarantee scheme is commendable. We’re also pleased to see infrastructure and getting to the last mile included among this year’s budget’s seven priorities. The budget’s emphasis on transportation and infrastructure projects through the Urban Infra Development Fund will undoubtedly benefit the logistics sector. The remodelled credit guarantee scheme for MSMEs, as well as the Rs 9,000 crore infusion into the corpus, will boost the country’s entrepreneurial mindset.
The retail industry did expect a few direct SOPs, which were completely absent from the budget, particularly in the area of input tax credit. Keeping a positive outlook, I see measures for putting more cash in the hands of individuals through relaxed tax sops as having a direct impact on their spending, and we see this as a small window of opportunity that can benefit the retail sector through increased spending.
Here’s what experts and industry insiders think about this year’s Budget.
According to Dinesh Pratap Singh, Co-Founder, WoodenStreet, “The new scheme announced by the Finance Minister falling under PM VIshwakarma Kaushal Samman for artisans and craftsman will enable them to improve the quality, scale, and reach of their products, integrating them with the MSME value chain. This will further include financial support and also access to advanced skill training, knowledge of modern digital techniques, brand promotion, linkage with local and global markets, digital payments, and social security. It will greatly benefit the Scheduled Castes, Scheduled Tribes, OBCs, women, and people belonging to the weaker sections.”
Dr. Deepak Jain, Founder, The Fragrance People,further added “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.”
According to Ridhima Kansal, Director, Rosemoore, “The union budget has announced a fresh corpus of INR 9000 Crores for guaranteed credit support for the MSME sector. This is a very positive step towards supporting the MSME segment, which is one of the critical cogs in the overall economic growth of India. There are close to 6 crore micro, small, and medium enterprises in India, and offering them support is not just conducive for the sector but will also foster growth in the overall economy.”
“The Union Budget 2023 is out, with a few hits and misses in the retail sector. 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 of it, the budget has increased cash flows in the hands of individuals through relaxed tax provisions; this will undoubtedly have a direct impact on their spending, and we see this as a window of opportunity that can benefit the retail sector through increased spending. Further reductions in personal tax slabs, rates, and other measures should help increase disposable income for the middle class, with a multiplier effect on the economy and retail and consumer sectors”, said Raghunandan Saraf, Founder & CEO, of Saraf Furniture
From $690 billion in 2021, the Indian retail market is expected to reach $2 trillion by 2032. It is currently the world’s fourth-largest retail market and is expected to generate 25 million new jobs by 2030.