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Union Budget - Stress on credit at reasonable rates, stimulus packages
Friday, 13 January, 2023, 08 : 00 AM [IST]
Ashwani Maindola, New Delhi
The Union Budget presentation is scheduled for Feb 1 and expectations are high as the Indian economy has now moved out of a pandemic, and the experts are expecting a rebound despite global turbulence and stress that will push India closer to the goal of a USD5 trillion economy over the medium term i.e., 2026-27.  

According to the Confederation of Indian Industries (CII), the contours of recovery are getting stronger and showing signs of revival.

“However, while India’s underlying growth drivers are strong, the spillovers from the evolving global conditions could pose headwinds for India’s economic recovery. On the domestic front, private consumption and investment is yet to fully recover from the pandemic induced disruption,” reads the CII statement.

For food processing, CII’s recommendation to the Union Finance Ministry reads, “Given its significance in promoting inclusive growth, there is a need for investment in product-specific climate-controlled infrastructure as well as brand development. Corporate participation is essential not only for investing in requisite infrastructure, but also to provide assured and value-added markets to farmers.”

And therefore improved access to credit at reasonable rates to processing industries will be key to sectoral growth, added CII.

The industry body suggested that the Government should provide a separate allocation of 10 per cent credit within the 40 per cent quota for priority sector, create a dedicated venture capital fund for startups to stimulate greenfield investments and innovation and the NABARD fund to provide affordable credit for setting-up of new units or modernisation of existing food processing units in designated food parks, should be extended to all food processing units, including those located outside the designated food parks.

Besides, CII says that an integrated holistic view of the agriculture value chain is crucial towards providing the necessary fillip to agricultural growth. This requires a joint participatory approach from all concerned stakeholders including the farmers, input side partners, traders, processors, and the government.

Budget Expectations—
Sanjaya Mariwala, executive chairman and managing director, OmniActive Health Technologies Ltd, India, and founder president, Association of Herbal and Nutraceutical Manufacturers of India (AHNMI), said, “Our primary expectation from the upcoming Union Budget 2023 is the rationalisation of GST in the range of 5-10% on nutraceutical products against the current rate of 18%, whereas pharmaceuticals are being charged at 0-12%. Nutraceuticals work as preventive health care solutions, thereby dropping the overall cost of health care in the country, so why should they not enjoy the same status as pharma.”

Mehul Sharma, founder & CEO, Signum Hotels & Resorts, stated, “The hospitality business anticipates receiving a consistent industry status from the government across the nation. Only a few states today have declared this status for us along with some excellent initiatives to support the hotel sector. However, not all states operate in this manner. Similar regulations should be implemented by the national government, which will significantly aid the industry & expansion.”

Chaitanya Bhamidipaty, co-founder, Roastea, noted, “The input costs have gone up substantially as the sector gets hassled by inflation and despite it being a prime contributor to the economy. While Atmanirbhar Bharat and Vocal for Local have been great proponents, much needs to be done to incentivise local brands of food and beverage businesses. Provisions such as full availability of the input tax of 5% and faster availability of the same will further boost the sector’s growth. In addition, making a provision for availing tax refund on tax paid on vending machines (18%) used to dispense beverages incorporates ( B2B) where the output tax is only 5%, leading to funds blockage for the MSME sector companies who usually do this business.”

Rajesh Ramakrishnan  managing director, Perfetti Van Melle India, opined, “One of the key expectations from Union Budget 2023 would be to fuel growth in the rural markets through a slew of initiatives around increased stimulus packages to boost farm income and greater number of infrastructure projects. Adequate investment in infrastructure, agriculture and social sectors will drive the pace of growth in the coming quarters. A key task for the Budget 2023 would be to develop sustainable growth models for increasing rural income so that there is a heightened demand for consumer products leading to a virtuous growth cycle.”

Tarun Gupta, chief product advisor, Nutrabooti, concluded, "The nutraceutical industry has been observing growth at a high pace. Covid-19 has highlighted the significance of individual behaviour and immune function in determining the course of the disease. After this, people have become more health-conscious and are inclined towards using nutraceutical supplements and health and wellness products in their daily consumption. The pharmaceutical products are subject to taxation ranging from 5-12%, while nutraceutical products are taxed at a rate of 18%. A report by the Global Wellness Economy found that there has been an increase in the consumption of immunity-enhancing foods and supplements as a result of the pandemic. In order to promote the health of the nation, it is important to support the use of nutraceutical products. Based on the surge of demand for these products, the nutraceutical industry is expecting a relaxation in the taxation rate in the upcoming Budget 2023-24 in order to provide supplements at less rates to the consumers."
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