Union Budget 2023: From FMCG to pharma and tourism, reactions from diverse sectors (2023)

After a tumultous start to the week following the Hindenburg Report causing a rout in Adani Group stocks, Indian indices got a breather as the budget instilled positivity across sectors. The government took a balanced approach, focusing on MSMEs and resolution processes for India Inc, and also providing relief for the Middle Class and the underprivileged. Reactions from opposition parties may have been mixed, with a former Finance Minister even saying that the government is out of touch with people, but Indian businesses are largely satisfied with the Union Budget 2023.

Here's how MSMEs, lenders, power firms, startups, electronics manufacturers and other sectoral players reacted to the first budget of Amritkaal.

FMCG and food products

Speaking on behalf of FMCG sector, Truly Desi founder Mohit Rathod said that, "Agri Accelerator Fund will inspire a lot of young entrepreneurs in the Agriculture sector to bring in new innovations by supporting them financially and make this space more organized. Additional provision of Marketing linkages should be considered for millet growing farmers and startups producing millet-based products as it will give a huge boost to the sales of millet based products in the domestic and international market."

Expanding on the same, GoodDot co-founder Abhishek Sinha mentioned how, "The focus on development of vital infrastructure like railway and highways would help improve the logistics requirements of the Agri and Industrial sector. The particular focus on Green growth as well as on Millets is welcome."

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Highlighting how the focus on the common man will benefit FMCG, nutritionist and FMCG Startup Win Everyday's founder Vipul Sandhya said, "Personal Income Tax should be reduced to increase availability of disposable income. This empowers people to opt for healthier food alternatives. Schemes, plans and subsidies should be introduced to support newer entrants in the health food space."

Agreeing with the view, Dipak Sanghavi, MD of popular achaar brand Nilon's added that, "The revised tax slab under the new regime is a positive change as it allows more money to be in the hands of people, which can boost the economy and increase consumption in the FMCG sector."

Travel and tourism

With the tourism sector and promotion of domestic travel over international destination finding a place in the Union Budget, Mauji Cafe's founder Vandita Purohit added that, "There is still a lack of awareness amongst hospitality startups with respect to how to access this for the larger benefit of the hospitality ecosystem and our economy. We appreciate this step taken by the govt of refunding 95% if the MEME startup fails, but this can also have a lot of unforeseen drawbacks for the last mile startups."

Others such as Tushar Parihar of Kaner Bagh were more optimistic and said, "The allocation of huge capital expenditure and the innovative plan for the growth of the tourism and hospitality sector also holds huge opportunities for jobs and entrepreneurship for youths.The industry was severely hit by the pandemic and faced a drastic drop in sales due to the lockdown and covid related curbs, for the last two years. But this year, however, I am looking forward to a fruitful and successful year as the business has returned in our favor."

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Speaking for hotels, Ramee Group MD Rajit V Shetty lauded the budget, saying, "The allocation of funds for the development of the tourism industry and the reduction in corporate tax rates for new businesses are expected to help revive the industry and create job opportunities for the youth. The budget has given a ray of hope to the Indian hospitality sector and will help it to bounce back from the impact of the pandemic."

As for destination ranking, Alike.io founder mentioned, "With a holistic focus on not only hard infrastructure, like physical connectivity, but also on softer aspects of Tourism experience delivery like Travel agent quality and tourist safety, the proposed destination rankings will help foster friendly competition among destinations to rank higher than their compatriots."

Small and medium sized ventures

Among smaller players in the vast oil and gas sector, Pune Gas Executive Director Jesal Sampat remarked that, "The enhancement of the credit guarantee scheme for the MSMEs will give a further boost to the already pressurized sector as many MSMEs still have a long path to recovery after suffering for a good two years due to covid lockdowns. The idea of a Digilocker is really great and will be welcomed in a big way by Proprietors, Partners, Owners and Directors of Companies. If implemented well, it can save precious time for doing KYC each time for every transaction."

As for the budget's support for the startup ecosystem, TapOnn Digital founder Dhruv Jolly mentioned how "Under the startup India initiative, the fund of funds for startups (FFS) scheme, Startup India Seed Fund Scheme (SISFC), and Credit Guarantee Scheme for Startups (CGSS) are implemented to provide capital at various stages of the business cycle of a startup. The initiatives which have been taken by the Govt. will definitely boost the startup ecosystem in the country and it will help to increase the Indian economy."

(Video) Finance Minister Nirmala Sitharaman presents Union Budget 2023 | 01 February, 2023

Pointing out what stood out for him, Roastea co-founder Anurag Bhamidipaty added that, "startups have been provided with an extension of one year on the date of incorporation for income tax benefits and the benefit of carrying forward losses on change of shareholding has been extended from 7 years of incorporation to 10 years."

Digital enterprises

Aiming for numerous opportuinities created for new-age startups by the government's tech push in the Union Budget, Pataa Navigation's co-founder Rajat Jain said that, "Our advanced addressing system can complement a few of the services proposed, such as in the 5G sector, intelligent transportation systems can be integrated with our smart addressing system to make it even more efficient and effective. In terms of artificial intelligence, Pataa’s location based predictive proximity location intelligence system can greatly aid agriculture and healthcare services with precision location and digital addresses that can be used to provide services. Additionally, Pataa can be integrated into the advanceddigilocker technologyfor provision of geotagged and verified addresses."

But speaking about the lack of focus on online gaming, Mobavenue CEO Ishank Joshi pointed out that, "All eyes were on the government's plan for the online gaming industry. However, during her speech, Finance Minister Nirmala Sitharaman said that the government will issue clarity on the taxation regime for online gaming. The gaming industry is growing rapidly in India and is anticipated to expand to new heights in the years to come."

Mobile accessories maker KDM's founder ND Mali highlighted incentives for the hardware manufacturers, saying, “The reduction in custom duty on certain mobile phone components will not only bring down prices but will also promote manufacturing in the country. A big thumbs up to budget for ‘Amrit Kaal’. It’s a budget for the middle class, Amrit Kaal and Aatmanirbharta. It’s a growth-oriented budget with focus on inclusive growth.”

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Among larger players, Tech Mahindra's Chief Strategy Officer, JagdishMitra mentioned that, “It is a very positive budget from a technology sector perspective, as it sets the right message about 5G labs, setting up AI centre of excellence and the focus around skilling, which is absolutely the key need for the country."

Pharma firms happy with components getting cheaper

On the reduction on customs duties, Hikal Limited's corporate affairs head Farhan Pettiwala remarked that, "The reduction of basic custom duty on acid grade fluorescence from 5% to 2.5% is a big relief for the pharma industry as it will make the domestic fluorochemicals industry Atma-Nirbhar. Similarly, the exemption of denatured alcohol, is used in chemical industry, will support ethanol blending program and facilitate energy transition. Meanwhile, 10000 Bio resource input centres will truly help India create a national-level Bio resource micro fertilizer and pesticide manufacturing network."

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