The finance ministry is busy with the planning for the upcoming fiscal year 2020-21. The union budget for FY 2020 is scheduled for presentation today. The finance minister has quite a few things on her table, ranging from slowing demand, low industrial output and the overall GDP growth pegged at an 11-year low of 5%. Ahead of Union Budget 2020, members of the food and beverage industry have expected a lot from the current budget.
Developing and Easing Credit Facility: “A lot of expectations from this year's budget. We would like the government to focus more on developing and easing the credit facilities for the small and medium businesses,” shared Shrey Kumar, Co-founder, Aadvik Foods - India’s first camel milk brand who believed that a lot of schemes are already available but the processes must be made simpler and more efficient.
Negotiation on export regulations: Dairy industry directly affects the farmers' income and their livelihood. “Export regulations for dairy products from India should be negotiated with the countries and Indian dairy companies should be allowed to export products to these countries,” added Kumar. Steps to increase purchasing power of the consumers will also be helpful in providing a necessary boost to the overall fmcg market.”
Focus on Growth of Organic Food: PC Musthafa, co-Founder and CEO, iD Fresh Food said, “I would like to see a budget that gives due importance to the organic food sector.” According to an ASSOCHAM-EY joint report, the Indian organic packaged food market is expected to grow from INR 533 million in 2016 to over INR 871 million by 2021. The government needs to create an ecosystem that helps enterprises to tap into the immense growth opportunities in this sector. “For more Indians to go organic, it’s essential to have a dedicated budget allocation for converting conventional farmers to organic farmers,” he added. It helps Indians eat healthy and stay healthy.
Sustainability should be in focus: Similarly, the government needs to incentivise companies to embrace sustainability. “One major incentive could be to wave off GST for a short period of time for products with plastic-free packaging. This will help businesses to come up with innovative solutions and alternative technologies to reduce their environmental footprint,” added Musthafa. Whether it’s replacing single-use plastic with eco-friendly materials or packaging solutions that focus on recycling, the FMCG industry needs the right push from the government to herald a green tomorrow.
Re-Introduction of Input Tax Credit: Moreover, favourable policies with regards to the tourism sector, given its enormous ability to generate employment and sustainable GDP growth, will go a long way to stabilise the economy and infuse cash in the system. “The reduction of corporate tax was a pleasant move last year, but there is an urgent need to re-introduce input tax credit for F&B companies under GST,” shared Gaurav Dewan, COO and Business Head, TFS.