While the country is still recovering from the Covid-induced economic crisis, brands are hopeful that the Union Budget, to be announced on February 1, 2022, will provide some relief. Many businesses that were badly hit due to Covid are still dealing with supply chain issues. They want the Government to provide concessions to the affected sectors and empower the consumers with liquidity to accelerate recovery.
“The expectation for this year’s Union Budget is that it sets the stage for economic revival, especially given the advent of the third wave,” said Dinesh Chhabra, Chief Executive Officer, Usha International.
“The consumer durables industry is one that has managed to bounce back fairly well and continues to grow steadily. Having said that, the abnormal surge in the price of raw materials, which started increasing over a year ago, has cast a shadow on revenue forecasts and continues to pose a grave challenge for companies. In addition, supply-chain logistics issues are also adding to the burden for businesses. For brands uncompromising in their quality, business becomes unviable, unless the burden of the price rise is passed on to the consumer. This rise in prices is impacting consumer spending, adversely affecting the recovery and growth of our economy. The need of the hour is for the government to intervene and put in place some policies in this year’s Union Budget, that will facilitate rationalisation of the costs of raw materials, fuel, and help smoothen supply-chain,” he added.
Vijay Kumar Mikkilineni, Head of Marketing, TCL India, said they are expecting a reduction in import tariff that will help India compete with countries like China, Mexico, Thailand, etc. He said PLI (Production-linked incentive) schemes have given momentum to international and domestic investments, however, investments from the Government will further strengthen the ‘Make in India’ movement. “We have to integrate India into the global supply chain scenario, and to achieve this tariffs should be equal or less than competitive markets,” stated Mikkilineni.
Mahesh Viswanathan, Chief Financial Officer, Finolex Cables, said this year’s budget is going to be critical from an economic stabilisation and growth point of view. The government's continued investment in asset creation and boost to infrastructural development will be a key focus point in these testing and uncertain time.
“The country's MSME sector has been on a growth trajectory and efforts should be made to ensure this sector is protected due to its long-term potential. Reliefs on income/personal income tax, provision of affordable housing, and consideration for the real estate sector along with accommodative banking regulations will play a major role in getting the progressive Indian economy goal back on track.”
Rajesh Uttamchandani, Director, Syska, stated the Government can help reduce import dependency and implement forward-thinking fiscal measures to boost domestic output. He also said there is a need for attention to the challenges such as developing a competitive manufacturing sector and climate change.
“Recently, the retail industry has been forced back into the survival mode due to an increase in Covid cases owing to the new Omicron variant. Given the prospect for production to drop as a result of current and proposed curfews, the sector may expect relaxation in the production targets that were under the PLI (Production linked Incentive) scheme,” Uttamchandani said.
“The forthcoming Budget will be critical in shaping the tomorrow of India's energy path, with the country putting a target of 2070 to achieve net-zero carbon emissions. Furthermore, there might be an emphasis on taking steps to boost production using emerging technologies and automation, which will not only boost both quantity and quality but also highlight the significance of switching to energy-efficient solutions. Under PM Modi’s visionary leadership, the manufacturing sector has always received the much-required support for growth and we are very optimistic that this sector will continue to get backing from the government led by our Prime Minister Narendra Modi and provide the country's economy a much-needed boost through the upcoming budget,” he added.
According to Aloke Bajpai, Group CEO and Co-Founder, ixigo, provisions by the Government can help strengthen the tourism industry and reach its pre-Covid levels soon. He said there has been a rise in domestic air travel from tier 2 and 3 towns. Budgetary focus on the development of infrastructure, technology, and safety measures of existing and new airports in Tier 2 and 3 cities will help boost tourism by improving connectivity with those cities where trains or buses may be the only connectivity today.
“We are looking forward to the government strategising a sustainable long-term plan to help revive international travel which is currently disrupted by ongoing waves. The introduction of innovative initiatives like the ‘sandbox schemes’ currently being followed by countries like Thailand and Indonesia will help India build a more resilient tourism economy going forward. We also expect the upcoming budget to allot incentives for domestic tourism and promote it within the country. IT deductions on domestic travel and tourism spends will help incentivise tourism and boost domestic travel further. Tax breaks and waivers for the airline sector will also help aid faster recovery of the industry. Bringing ATF under the ambit of GST (which currently comprises 40-45 percent of the total operating cost of an airline) will bring much-needed relief to the aviation sector,” he elaborated.
Citing similar sentiment, Sushanth Pai, Chief Financial Officer, Matrimony.com, said, “Some sectors such as travel and hospitality have been heavily impacted due to the current situation. The budget should focus on support to revive such sectors. A study of all the policy reforms needs to be undertaken with greater intensity to see how they can be implemented effectively and with speed, so that the basic ecosystem of well-being can be boosted.”
On the other hand, the crypto industry is waiting for more clarifications on the regulation of the sector from this budget. “Various macroeconomic developments in India and the world over the last year have led to a rise in crypto adoption in India. Today, leading crypto exchanges follow strict self-regulatory practices to ensure customer protection. We hope the upcoming Union Budget will bring in regulatory clarity and help standardise best practices, address misconceptions around this emerging asset class. We believe a regularised environment will encourage more Indians to start their crypto investing journey, promoting financial inclusion in line with the government's vision,” stated Sharan Nair, Chief Business Officer, CoinSwitch Kuber.
Focus on empowering digital infrastructure
With the digital revolution taking place across the globe and the country. Brands want the Government to focus on empowering the digital and technological infrastructure. “As digital adoption and transformation accelerate, there is a need for increased allocation to improve internet infrastructure and connectivity to bridge the rural-urban divide across geographies. We are hopeful that the upcoming Union Budget will be aimed at accelerating economic reforms, promoting entrepreneurship, and providing stimulus packages that will help fuel consumer demand across sectors,” said Chhabra of Usha International.
The budget will be crucial for the auto sector and a key area of focus will be electric mobility said Greg Moran, CEO, and Co-Founder, Zoomcar. “With several Indian and international groups keen to invest in the Electric Vehicle (EV) segment, the Government should focus on bolstering the infrastructure to enable easy manufacturing and usage of EVs and EV-related elements such as charging kiosks to boost demand. With regards to technology, we are in the midst of one of the biggest tech-led transitions in India and the world and we expect that this year’s Union Budget will focus more on tech-led developments in the auto sector. It presents the perfect opportunity for the industry to capitalise on and boost growth. We also look forward to more tax incentives for the travel and trade industry,” stated Moran.
Adding to the same, Sai Srinivas, Co-founder and CEO at MPL, said the online gaming and esports industry has shown exponential growth in the pandemic. The industry now hopes the Government of India will introduce measures to adequately support this next phase of growth. “Online skill gaming companies, which have flourished amid phenomenal investor interest, are well-placed to create jobs in roles ranging from VFX designing to software development. The Budget should consider levying a lower tax slab than the existing 18% to aid this. With esports a medal event at the Asian Games, and continuing to gain prominence, this will also help incentivise a greater number of professionals to get into esports and represent the country at global tournaments of this stature.”
“The industry will also benefit from a fund that can provide capital to talented developers and designers, putting India on the path to becoming the hub for game development globally. Access to infrastructure will be crucial in this regard. This can be achieved by establishing specialized AVGC Centres and Universities for talented designers, visual artists, and developers who may have the capabilities but not the resources to build world-class games. Lastly, we hope that this year will bring more clarity from a regulatory standpoint. Online skill gaming suffers from a lack of differentiation from prohibited categories and games of chance. A uniform policy will be welcome and provide much-needed stability to the sunrise sector,” added Srinivas.