As the countdown for the Union Budget 2023 has started, different sectors of the Indian economy have high expectations from the government. The food and beverages industry too is looking forward with some measures for the sector. Experts have highlighted the contemporary needs and have made some demands to be incorporated in the Budget.
Amit Jatia, vice chairman, Westlife Foodworld Ltd. (McDonald’s India W&S), said, “The last fiscal saw the QSR industry benefiting from reviving economic growth and an increase in consumption. The QSR industry expects the upcoming Union Budget to focus on policies that will keep the economic recovery on track and further strengthen the ease of doing business. Additionally, the industry anticipates some relief in the ITC (Input tax credit) to help boost the sector’s growth.”
Jatia added that the current GST rate on restaurants is 5%, with no input tax credit. “This is a comparative disadvantage for the restaurant and food industry, as other sectors receive input credit back, leaving the restaurant and QSR chains as the only industry in India liable for GST input. This poses a significant challenge for the industry today. Aside from that, import liberalisation on some raw materials and the acceleration of the free trade agreement will further aid overall industry growth.”
Barista Coffee Company’s CEO Rajat Agrawal also highlighted the re-introduction of Input Tax Credit.
“Today non availability of input credit is the biggest loss for the F&B industry and has a big bearing on the P&Ls as well as the cash health for the business. Compared to other industries, F&B business stands at a distinct disadvantage. Reintroduction will not only support the F&B business, but will also give a much needed impetus post the pandemic years to cover up on the financial exposures which businesses have gone through. Special Incentive schemes and easy credit eco-system for funding growth and on usage of indigenous goods which supports Make in India initiative,” Agrawal said.
Shikhar Veer Singh, co-founder, Samosa Singh, added that the ripple effect of the shutdown presented a significant influence on India’s economy, affecting all business sectors, resulting in low revenue production as a result of the eventual halt/slump in product/service sales.”
Singh added that the pandemic forced food start-ups to re-evaluate their management and operation of their businesses, including revisiting their business plans and making several changes to best tackle the evolving business landscape and customer preferences, reduced demand, supply and inventory concerns, etc., to make it simpler and more effective for start-ups to carry out business and bounce back with the new vigour.
“With the new impending budget announcement—we are expecting that the government offers some relaxations in view of the rising costs and reduced margins. The shift in the consumers’ preferences and purchasing patterns, the rising costs and inflation, online deliveries and the change wave induced by the pandemic are further catalysing the demand for some relaxations in GST percentage and norms by the government to support in the growth and acceleration of this industry and the eventual economic boom—growth of the industry with promising potential and brighter future,” Singh urged.
Vinay Maheshwari, founder and CEO, The Health Factory, highlighted that the overall F&B Sector is essential to our nation’s growth and development, so it’s critical that the government keeps this sector at the top of the upcoming Union budget for 2023-24.
Maheshwari urged an increased funding under the MSME incubator scheme to support the food & beverages processing sector, as well as measures to connect the MSME sector using the PM Gati Shakti project to leverage the supply chain infrastructure. This will help in increasing the reach to more customers and continue to grow their business, he added.
Maheshwari is also looking forward to changes in Input Tax Credit (ITC) and special provisions for companies that are committed towards making healthier products under the Make in India initiative.
“Set up a community for young businesses that encourage the consumption of healthier products that are good for one’s overall health, this will boost and promote a healthier lifestyle in the country,” Maheshwari said.
Union Budget 2023 will be presented on February 01 by Finance Minister Nirmala Sitharaman.
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