Will Budget 2019 bring good news for Tier markets?
With 2019 general elections nearing, Budget 2019 will be the last tool for BJP Government to meet the expectations of common man and the corporate sector
With only one day left for the Union Budget, expectations are high and marketers are hoping some favourable announcements from the government. The Budget 2019 will be the last interim budget of Narendra Modi’s regime ahead of the Lok Sabha elections.
The general audience is expecting many reforms from the government, mainly in the income tax slab. The Finance Minister in the last Union Budget kept the income tax slabs unchanged, with only few changes like bringing back standard deduction for salaried individuals.
With the advent of the New Year, the BJP Government brought some changes in the FDI policy and issued statement to e-commerce players against giving deep discounts and selling products from entities in which they are stakeholders. It is seen as a government’s strategy to protect the business of small retailers. However, the policy is still to be implemented and major e-tailers have already asked for more time from the government. In the last budget, the government aimed at driving financial inclusions and allocated Rs 3,073 crore for the fiscal year 2018-19 to Digital India. We reached out to industry experts to know their views and expectation from the upcoming budget.
According to Mansoor Ali, Chief Sales & Marketing Officer, Hamdard India, the government should bring effective measures to advance the Tier markets, “For Budget 2019, continued efforts and measures to further boost the Tier II and III markets are anticipated. Food processing sector is a crucial point as it walks the fine line between agriculture and the industry, hence holds importance. Thus, encouraging policies in food processing will bring in greater efficiencies at farmer, brands and consumer level. All in all, measures that make agri value chains efficient are welcomed for the FMCG sector.”
He also added, “The measures taken by the Government has improved the economic and commercial fabric. Initially, the trade and consumers had difficulties in alignment with the change in policies and reforms but, the overall arch has been one of transformation”.
"Media and Entertainment industry has grown at approximately 11 per cent in the last year. It is expected that media industry will keep growing at approximately CAGR of 13 per cent. The government should spend more on digital media for tenders; jobs should be done through digital media where SME digital players should be given opportunity to grow. They should boost growth of start-ups as they are the ones who spend a lot on digital media and technology. The boost can be in the form of simplifying the taxation on fundraising, any form of subsidies etc,” said Jigar Zatakia, Founder & CEO, FirstEconomy.
Rahul Garg, CEO & Founder, Moglix, believes the government should bring such regulations that could ease the start-up industry, “We are looking forward to the upcoming budget, as it is expected to bring some significant changes in policy and tax system. In the past, making way for the GST, policy reform and implementation around digitalisation, etc by the government led to rise in India’s ranking in the ease of doing business index. However, the recent policy amendment to the foreign direct investment (FDI) bill is ambiguous and can slow down the speed of start-ups in the country. The government should come up with regulations that simplifies our life as entrepreneurs and makes it easy to run businesses. The government in the past has introduced several schemes targeted to encourage and boost the start-up ecosystem, however we still have a long way to go and a steady momentum needs to be maintained.”
Upasana Taku, Co-founder and Director, MobiKwik wants the government to continue to focus on start-ups. “In the upcoming budget, we expect more policies and reforms around the 'Make in India' and 'Digital India' initiatives to be announced. The government has recently announced the formation of Committee for Digital Payments and we are hopeful that it will continue to push digitisation of financial systems that will encourage more consumers to do their financial transactions digitally. With UPI, India Stack, etc the opportunity is huge. Also, we are hoping that there will be a more specific plan and budgets for connecting remote areas and villages through high speed optic fiber networks and building Wi-Fi spots in Tier-1 and cities,” she explained.
Brand Expert N Chandramouli, CEO, TRA said, "GST is a very good thought and has been pending for over two decades to become a law. One country, one tax is very beneficial indeed, but its implementation is impractical. The cash flow cycles of small and big businesses has been severely impacted. Frequent rate changes are a sign that the government sacrificed aspects for speed of implementation.”
Ramesh Kaushik, Vice President, Brand Experience, Blackberrys Menswear, highlighted that Retail sector in the last year has received tax exemption of 25 per cent on MSME companies. “One of the most significant accomplishments of the government is indirect taxation system through the goods and services tax (GST). Despite demonetisation and GST there is clamour for more reforms in the industry. Initially, GST has been disruptive reforms in the industry but later was accepted here. It has resulted in businesses to streamline distribution systems—production, supply chain, storage—to make them more efficient, having previously been forced to design them keeping state taxes in mind,” he concluded.
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