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Experts laud Budget for focus on sustainability, millets, hospitality
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Friday, 03 February, 2023, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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Prahlad Singh Patel, Minister of State for Food Processing Industries, has called the Union Budget as ‘all inclusive and development oriented’ while welcoming the increment in budgetary allocation for the Ministry of Food Processing Industries.
“The budget for the PLI scheme for the food processing sector has been increased by Rs 500 crore. The budget was increased from Rs 1022 crore to Rs 1530 crore while Rs 75,000 crore will be invested to strengthen the logistics sector thereby enabling the entire value chain of the processing sector,” he said while commenting on the Union Budget that was presented in Lok Sabha on Feb 1.
Patel added that the ‘One District One Product’ along with ‘GI Product’ schemes has been impactful for promotion of local products and taking the initiative further, the Government has taken steps to make India a global hub for millets as well.
“These programmes will immensely benefit the small farmers and help in doubling their income,” the minister said.
Meanwhile, experts say that some of the key areas need more focus like organic farming and taxation policies with respect to the food processing sector.
Arpita Mukherjee, Professor, ICRIER, said, “While the Budget talks about organic farming and shows impetus to organic farming which is very good, there are no schemes and policies to support farmers who incur high costs of third-party certification and laboratory testing. While PGS has subsidies, it is a self-certification process and is not recognised by developed countries and even APEDA does not allow its exports. There is a need for a scheme and policy to help ensure authenticity and traceability of the organic supply chain and provide support to the costs farmers’ incur in the process.”
She added that in India, organic farming is costly and so are nutrient-rich processed food products.
“The Economic Survey rightly points that India is moving from food security to nutrition security. Thus, there is a need for nutrition-based GST. For example, taxes can be high on beverages with high sugar content and lowest on those which do not have sugar and/or have the right nutrition mix like no added sugar fruit drinks. This will provide incentives to the food processing sector to invest in nutritious products and do R&D and innovation to produce food products which are healthy and nutritious. Similarly, incentives and subsidies could have been given for production of healthy and nutritious food products. Taxes and subsidies are good tools to facilitate the right diet and support the government initiatives like the Eat Right initiative of FSSAI,” said Prof. Mukherjee.
Budget Reactions –
Piruz Khambatta, group chairman, Rasna Pvt Ltd, said, “As India assumes the presidency of G20, the Budget sets the tone for showing the world that India is a responsible and accountable democracy by ensuring that while we meet the aspirations of all Indians be it youth, the rural folks, marginalised women, or the middle class, we are also giving focus to the developmental goals set under G20 and also ensuring that our growth is sustainable by ensuring focus on sustainability issues like green energy etc.”
Some of the budgetary highlights -
1. Women Related Farmer Cooperatives in the areas of agriculture, fishery, and dairy.
2. Digital Public Infrastructure for Agriculture
3. Agriculture Accelerator Fund for Rural Startups so that we create more rural startups in Rural Area like Urban India in IT.
4. PPP Model Farmer, State, Industry partnership
5. Rs 2200 crore High Value Agriculture, Horticulture fund
6. Making India the Millet Hub of the World
7. New schemes such as PM Matsya Sampada Yojana
8. Emphasis on Natural Farming and Organics
“Also the reduction in taxes of the middle class would help increase the consumption of FMCG products and other consumer durables and nondurables which will only boost the economy further. The fact that India today stands for fiscal discipline while half of the world is struggling with inflation rate beyond normal and fiscal deficit out of control, to have a Finance Minister of a developing country to announce fiscal targets is a very welcome move and would be appreciated in the world,” added Khambatta.
Sheetal Bhalerao, chairperson and managing director, Wardwizard Food and Beverages Ltd, said, “The government’s focus on reviving MSMEs, agri-infrastructure, digital payments, tax reforms, and job creation is welcome and encouraging.”
Tarak Bhattacharya - executive director and CEO at Mad Over Donuts, stated, “There were no significant direct takeaways from the Union Budget 2023 related to the F&B or the QSR industry. Still, there are some interesting aspects which will help our business. Government will select 50 destinations, to promote tourism on mission mode. The Finance Minister said that with an integrated and innovative approach, at least 50 destinations will be selected through challenge mode. This will increase the movement of people towards these locations thereby giving a chance to increase travel and hospitality businesses that will help us too. This is positive news for the F&B industry as more tourism indicates higher footfalls. Regional air connectivity will be improved in the country allowing more flights, helicopters, and water aerodromes to operate. This again increases tourism and can benefit the F&B as well as the QSR industry. The government has also reduced the income tax rate and raised the income tax limit to 7 LPA, allowing people more disposable income to spend more on food and leisure. Again a positive sign for the F&B industry.”
Anand Nagarajan, co-founder, Shaka Harry, said, “For the food sector, we see tailwinds from programmes like the Year of Millets, and PLI for food and export promotion. Smart protein is a sunrise sector and startups here must focus on putting India on the global protein map. The government’s efforts to support agri-tech startups by setting up Agricultural Accelerator Fund as well as initiatives are welcome."
Rajit V. Shetty, managing director, Ramee Group of Hotels, said, “The Budget announced an allocation of Rs 2,480 crore for the development of the tourism industry, including the hospitality sector. This will be utilised for the development of tourist infrastructures such as tourist facilitation centres, wellness centres, and more. The government has also proposed the creation of a National Recruitment Agency to provide employment opportunities for the youth in the hospitality sector.
Additionally, the Budget has proposed a reduction in the corporate tax rate for new hotels, restaurants, and tourism-related businesses. This move is expected to encourage investment in the hospitality sector and provide a boost to the industry. The government has also proposed a scheme to provide easy access to credit for small businesses in the hospitality sector, which will help them to cope with the impact of the pandemic.
In conclusion, the Union Budget 2023 has provided a much-needed boost to the Indian hospitality sector, which has been hit hard by the Covid-19 pandemic. 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.”
Jaison Chacko, secretary-general, Federation of Hotel & Restaurant Associations of India (FHRAI), said, “The revamped Credit guarantee scheme for MSMEs with an infusion of Rs 9000 crore into the corpus is expected to help small and medium-scale hotels and restaurants. The hospitality industry's long pending requests for infrastructure status, uniform GST, and placing tourism on the concurrent list of the constitution have not been met but the new announcements are positive signs of the Government’s intent about working on them in the near future.”
Ankit Alok Bagaria, co-founder, Loopworm, stated, “The Rs 6000 crore infusion to promote fisheries would help shrimp farming the most. Decreasing import duties on feed ingredients is going to help the feed manufacturers and help formalise animal agriculture but would lead to reduced margins for domestic feed ingredient manufacturers.”
Amarpreet Singh Anand, CEO and founder, Superfoods Valley, said, “The announcement of the launch of a new scheme (PM-PRANAM) in the Union Budget 2023 is a welcome move. Under this initiative the government will “incentivise” states and Union Territories to promote alternative fertilisers and balanced use of chemical fertilisers. Excessive and disproportionate chemical use is one of the leading causes of micronutrient deficiency and malnutrition. In India, malnutrition is a serious public health issue. For healthier development and growth of the human body micronutrients are absolutely essential. Coming on the heels of the food fortification programme, this highlights the government's dedication to bridging the nutrition gap in India.”
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