Union Finance Minister Nirmala Sitharaman presented the Union Budget for the financial year 2023-24 on 01 Feb 2023. By terming it as the first budget of the Amritkal, the government may emphasize that it is the time to look forward. During the past several years, due to the global pandemic and threat of looming war in Europe, arguably, she was doing the most unenviable task of presenting the best recipe to balance the economic and political targets and wish lists.
In the backdrop of failing economies in our neighborhood, one might have expected a cautious approach in framing the budget. Still, instead of finding ways to stay afloat, the Modi government presented a feel-good budget in its characteristically audacious ways. From a political perspective, it proposed tax benefits to the salaried class, an increase in outlays for PM Awaas Yojna, a continuation of free grains, special emphasis on women, tribal and youth; however, the real centerpiece of the budget is perhaps the 33% increase in capital investment with a focus on infrastructure, new technologies and jobs.
The FM has structured the budget initiatives on seven pillars: inclusive development, green growth, reaching the last mile, infrastructure, unleashing the potential, youth power and financial sector.
Initiatives like an agriculture accelerator fund to encourage agricultural start-ups by youth entrepreneurs, the Green Credits programme meant to incentivize companies to take environmentally sustainable and responsible actions and a 10 thousand crore Gowardhan scheme to promote circular economy are expected to have positive impact across multiple industries such as storage, logistics, packaging, delivery and production of food.
The FM proposed to increase the agriculture credit target to Rs. 20 lakh crore focusing on animal husbandry, dairy, and fisheries. A new sub-scheme of the PM Matsya Sampada Yojana with an outlay of Rs. 6,000 crore will target investment to boost the seafood industry, improve post-harvest management and marketing, improve value chain efficiencies and help expand markets for fishermen, fish vendors, and SME vendors.
Aligning with India’s efforts to popularize millets globally and take a lead in millet research the government has announced to develop Hyderabad-based Millet Institute as the center of excellence.
Post-budget reaction from the food and beverage industry
Dabur - Mohit Malhotra, chief executive officer, Dabur India
"Finance Minister Nirmala Sitharaman’s last full-fledged Union Budget before the 2024 Lok Sabha elections is a progressive, growth-oriented budget that promises to put more disposal income in the pockets of the consuming class, particularly the middle class, while focusing on building a new India with its heavy focus on capital expenditure.
The biggest positive, according to me, is the 33% increase in overall Capital Expenditure Outlay on Infrastructure Development, which will take India towards become a true global powerhouse and help urbanise the hinterland. The Government's decision to set up a Rs 10,000 crore per year Urban Infrastructure Development Fund to be used for creating infrastructure in Tier-2 and Tier-3 cities will go a long way in boosting overall consumer confidence, and also help generate employment.
The greater focus on agriculture with a new Agriculture Accelerator Fund being set up; extension of the concessional institutional credit through Kisan Credit Cards to animal husbandry and fisheries sector; and an outlay of Rs 2,200 crore towards Atmanirbhar Clean Plant Programme will provide the much-needed solutions to present-day challenges of farmers. It would also be highly beneficial for companies with a strong rural footprint and would help drive growth for the consumer products industry. Dabur has been investing ahead of the curve in strengthening its rural footprint, which today covers over 1,00,000 villages. This exercise would further gain pace, going forward.
The 7-point agenda for this year’s budget with a clear focus on building social infrastructure, reaching the last mile, driving inclusive development, green growth and harnessing the country’s youth power, ticks all the right boxes. I am certain that these measures would help reduce the gap between the haves and have nots in the country.
Her focus on empowering the middle class with the higher exemption limit and new tax slabs would provide some relief to the salaried class and put more money and more savings in the hands of the common man.
Overall, this Budget is all about maintaining continuity and accelerating economic growth. I would call it a progressive Budget that balances growth with fiscal prudence while laying down the blueprint for creating an enabling framework that would promote an Atmanirbhar Bharat."
iDFresh - PC. Musthafa, chief executive officer and co-founder, iD Fresh
"After three years of battling the many pandemic-induced challenges, India’s Union Budget 2023 inspires hope for a better year ahead. Particularly for young Indian entrepreneurs. The proposal to set up the Agriculture Accelerator Fund to encourage innovative startups in rural areas, for instance, has the potential to be a huge catalyst for growth.
There’s much to rejoice for salaried individuals too. I believe that the relief provided by the government’s direct tax proposals will ultimately drive greater demand for consumer goods, as the disposable income surges. This, in turn, will provide a strong impetus for businesses across sectors.
As an entrepreneur, I have always been a fervent advocate of education and employment for all. The Finance Minister’s proposal of setting up a National Digital Library for children and adolescents is truly commendable. As is the decision to set up 30 Skill India International Centres for the youth across different states. These initiatives will, certainly, pave the way for a stronger economic outlook for our country."
Shaka Harry - Anand Nagarajan, co-founder, Shaka Harry
"Government’s focus on green growth and pushing for a Green economy is very encouraging. There are ambitious plans for a Carbon footprint reduction roadmap along with allocation for green hydrogen, solar, and EV mobility - these are all great steps. For the food sector, we see tailwinds from programs 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 funds as well as initiatives are welcome. Until a few years ago, startups would not feature in the national budget. More recently the push to promote startups is very encouraging. It's early days but a very exciting time for startup founders in the country".
Greendot Health Foods - Vikram Agarwal, managing director, Greendot Health Foods
“It is a very promising and encouraging budget that ensures to be a stepping stone for a strong economy. India is on the path to become a developed economy from a developing economy. This budget ensures that we would grow at a steady rate of 6.5% to 7% which is the fastest in the world.
The reduction in import duty will offer relief to import and export companies and boost domestic manufacturing. The new tax regime which has been curated to benefit the all class, It would leave more disposable money in the wallet which would boost spending and overall GDP.
The initiative of an Agriculture Fund to be set up will boost the agri related Industries, Investment in Agri Startups would help to bring fresh ideas and innovation in the agri space. Renewed focus on Millets would make India a global hub for millets which is catching up globally.
Infra space has been allotted an outlay of 10 lakh crores would ensure that we have an infrastructure at par with the global peers which would attract a lot of International Capital.
Overall it’s a very balanced budget."
BL Agro - Ghanshyam Khandelwal, chairman, BL Agro
“This year’s budget went beyond the realm of imagination. While it did not shed any particular light on the FMCG sector, it broadened the horizon and touched upon every area where India needed growth and progress. Instead of narrowing the focus to a limited niche or industry, it supports every area of potential in the economy, from MSME to education, from AI to green energy.
In that aspect and the control of the fiscal deficit, the budget threads the needle with precision and indeed is praiseworthy. The three niches of concentration were skill enhancement, filling the gaps in production or infrastructure, and health.
Take, for instance, health and wellness. The colleges for nurses are only part of it; the push on millet is an ancillary route to wellness. Millets like jowar and bajra are a natural way to provide the body with supplements, offering more holistic nourishment.
Overall, it’s a Swadeshi budget through and through that equally benefits all and sets the country on a path to steep progress and development.”
Cosmo First - Pankaj Poddar, Group chief executive officer, Cosmo First
“The budget is in line with the vision of the government where the main focus is on infrastructure development and making India Atmanirbhar by strengthening our MSME sector and boosting the start-ups in India not only in fintech side but now also on agritech as well. The decision of introducing ‘Vivad se Vishwas’ to return 95% of bid to the MSMEs in case of failures to execute contracts during the Covid period and bring another dispute resolution scheme under Vivad Se Vishwas-2 to settle commercial disputes is indeed a great relief for businesses. The infusion of Rs 9,000 crore through the revamped credit guarantee scheme and additional collateral-free credit of Rs 2 lakh crore to MSMEs and reducing cost of the credit by about 1%. Through these initiatives, India will emerge to become a 5-trillion dollar economy.
Where the other economies of the world are showing signs of recession, Indian economy will grow by 6.4% - 6.8% in next year. Fiscal deficit will also get reduced to 5.9% next year from the present 6.4%. The industry was expecting a major boost in manufacturing sector by extending the last date for setting up a new manufacturing facility with lower tax rate benefit. However, the overall Union Budget 2023-24 is positive and will drive growth of the MSME as well as the start-up sector and give a boost the infra sector.”
AGI Glaspac - Rajesh Khosla, chief executive officer and president
"We are happy with the Government's new initiative for promoting R&D in the pharma sector, to further help position India as a leading hub for R&D on the global stage. We eagerly await to see how the relevant schemes and initiatives will strengthen the industry in the new fiscal year quarters.
The 2023-24 budget sets a positive trajectory for a greener and more sustainable future for India's economy. The emphasis on inclusive development and green growth, highlighted by the Finance Minister, aligns with global sustainable development goals. To stay competitive in the global market, it is crucial for manufacturing companies to meet ESG standards. The Green Hydrogen Mission, Green Credit Programme, PM-PRANAM, and GOBARdhan scheme emphasized in this budget will play a crucial role in meeting these standards, reducing carbon intensity, and creating numerous green job opportunities in this sector in India. This budget marks a significant step towards a more sustainable future for India."
Sunpure - Gokaran Singh Pawar, national sales head, Sunpure
“Inclusive development is one of the biggest takeaways from India’s Union Budget 2023. It’s reassuring to note that the Finance Minister recognises the need to educate, equip and empower farmers by building an accessible and informative ecosystem that adopts a farmer-centric approach.
The focus on chemical-free natural farming, by setting up 10,000 bio-inputs to facilitate farmers to adopt natural farming, is a significant step in the right direction. As is the emphasis on sustainability through the Green Growth initiative. This will not only help boost agricultural production, but will also greatly enhance the quality of the produce.
I strongly believe that building digital public infrastructure for agriculture as an open source, as proposed by the Finance Minister in her speech, will create huge momentum for the agricultural sector in India. As will the agriculture accelerator fund to encourage innovative solutions by young entrepreneurs in rural India. Sabka Saath Sabka Vikas must entail development by the people, for the people."
Nutrition Dynamic Foods - Arpita Doshi, chief executive officer and founder
''The Millets Institute's government funding will attract many startups to benefit from food processing research, where few innovative startups struggle to scale up. Millets are the most energetic, low-GI foods that are rich in natural proteins and dietary fibers and help reduce the global diabetes burden that 70% of the population faces. For decades, the Hyderabad-based Institute of Millets has been researching nutrition security in processed foods, and it will play an important role in the millet segment in India and around the world. Millets are widely consumed as a nutritious food all over the world. India is at the forefront of global leadership in the millets segment.''
Monika Alcobev - Kunal Patel, managing director, Monika Alcobev
"The Union Budget 2023 was a very business-friendly one. Several initiatives were announced to enhance the Ease of Doing business by reducing compliances and decriminalizing legal provisions which will boost business growth. More clarity on what these are would be appreciated for sure.
The various initiatives, including revamping the credit line, announced to support MSMEs and startups are very encouraging for young entrepreneurs.
Many of the announcements (including the higher rebate on income tax) will help create employment, and help train people for jobs in the future. This is a critical aspect in ensuring business stability, particularly given expected market conditions.
Tourism was also one of the key focus areas of the budget. The new-age initiatives like an app for tourists, Dekho Apna Desh, Swadesh Darshan initiative, etc., will promote more participation from the younger generations, and will subsequently boost the growth of associated F&B brands."
Nandu's - Narendra Kumar Pasuparthy, chief farmer, chief executive officer and founder, Nandu's
"India’s Union Budget 2023 has come as a breath of fresh air, particularly for startups in the agriculture sector and agri-related industries. Right from the Agriculture Accelerator Fund (for entrepreneurs from rural India) to the agricultural credit target (increased to Rs 20 lakh crore with a focus on animal husbandry, dairy and fisheries), the initiatives are designed to empower more businesses to thrive.
It's encouraging to note that 39,000+ compliances have been reduced and 3,400+ legal provisions decriminalised in order to improve the ease of doing business in India. Also, the extension of tax holiday and capital tax exemption by one more year will definitely offer some much-needed relief for startups, after the arduous journey of the last three years.
For me, the biggest encouragement from the Budget was the emphasis on the adoption of green energy. At Nandu’s, 90% of our farms are run on solar power and we are inspired to further adopt green tech to create a sustainable future"
Wardwizard Food and Beverages - Sheetal Bhalerao, chairperson and managing director, Wardwizard Food and Beverages
“We welcome the Union Budget FY-23-24, which is focused on the growth of the economy and the upliftment of all sections of society. The government’s focus on reviving MSMEs, agri-infrastructure, digital payments, tax reforms, and job creation is welcome and encouraging. This budget provides a good opportunity for businesses like ours to accelerate and foster economic growth and development, create jobs and contribute to nation-building. I am confident that this budget will have a positive impact on the Indian economy and will help us to achieve our business objectives.”
Gram Unnati - Aneesh Jain, founder, Gram Unnati
"The budget is a game changer for the agriculture sector in India. The government has taken bold steps in digitising the sector with the creation of an open-source digital public infrastructure and accelerator fund. The push for a green plant programme hits the nail on the head for boosting productivity and profitability, and the increase in credit will provide much-needed financial support to the industry.
The plan for decentralised storage capacity will empower farmers to store their produce and receive fair prices. Overall, this budget will play a crucial role in modernising and revitalising the agriculture sector in India, bringing economic growth to rural areas."
Nourish You - Rakesh Kilaru, co-founder and chief executive officer, Nourish You
"Finance Minister Nirmala Sitharaman stated that millets are the most utilized grains. Overall the Union Budget has an optimistic outlook for the agricultural sector. Nourish You is well aligned with the government's vision of promoting millets as the healthiest grain. India currently stands as the largest producer and second-largest exporter of millets. With focus being placed on much needed research, it will work as a catalyst in boosting overall growth and consumption of millets as a whole. Nourish You’s extensive and focussed research and development over the past few years have enabled us to develop cutting-edge millet products that we aim to introduce in the market this year. The budget will help drive the millet revolution in India and create a dominant place for it in the agri sector."
Roastea - Anurag Bhamidipaty, co-founder, Roastea
"The Union Budget 2023 has taken a very nuanced growth-centric approach, unlike the previous few budgets. While addressing global challenges and inflation, it has tried to pave the way for an “Atmanirbhar Bharat” by focusing on macroeconomic stability.
The budget rightly realizes the growing importance of digital infrastructure and AI as catalysts of the next wave of economic development. By focusing on segments such as entrepreneurship development, urban planning, and tourism, the Government has made its intent clear on looking at an alternative way to untapped potential.
The budget highlighted the importance of entrepreneurship culture, allocating Rs 10 lakh crore for capital expenditure – an increase of 33% from the previous year, representing 3.3% of GDP. To further incentivise the establishment of co-operatives, a 15% corporate tax benefit has been extended to new manufacturing co-operatives until 31st March 2024. Additionally, 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.
Lastly, the changes made in the personal taxation regime are a much-needed step as this will encourage domestic consumption and continuation of economic activities, which will boost local businesses. The finance minister highlighted the impressive growth of the Indian economy, which has increased in size from tenth to fifth largest in the world over the last nine years. They also addressed all sectors in the budget proposals ensuring all-around growth.’’
Lil'Goodness - Harshavardhan S, co-founder and chief executive officer, Lil'Goodness
"The focus on millets, especially to further enhance technology and applied research will provide a boost to millet based products which have proven their health benefits amongst Indian and global consumers. The additional support to "Shree Ann" through the Indian Institute of millets research will provide a fillip to value addition across the value chain.
Investment to create skilled manpower for healthcare through enhancing capacity of medical colleges and trained biomedical specialists will create the backbone required for improving the quality of healthcare across the country."
Wholsum Foods - Meghana Narayan and Shauravi Malik, co-founders, Wholsum Foods (makers of millet-based children’s food brand Slurrp Farm)
“Union Budget of 23-24 envisions India becoming the global hub for millets. As a millet-focused brand, we applaud this step to make India the global leader of this supergrain. The Government of India has led the campaign for 2023 to be earmarked International Year of Millets and today’s budget proves their intent to drive measures which can increase the popularity of millets in both domestic and global markets.
The Govt has also announced turning the Indian Institute of Millet Research- Hyderabad into a centre of excellence to foster innovation which is especially commendable and will continue to help brands like us in enabling adoption and achieving India’s millet dreams. In addition to this, the government is planning to set up an agriculture accelerator fund to encourage startups in rural areas, which we believe is the need of the hour.
We are ready to support the government of India in achieving this vision through innovation in the value add sector, branding and marketing to make millets acceptable across the world, and promoting the export of millets. We wholeheartedly welcome these initiatives and are excited to see how it aids in the development of the industry.”
Krishify - Rajesh Rajan, chief executive officer, Krishify
"Government’s move to establish an agriculture accelerator fund will certainly encourage a greater number of startups to emerge and scale up their unique solutions, fast-tracking innovation in the sector.
Secondly, the decision to build the digital public infra for agriculture as an open-source, interoperable public good will tremendously help in strengthening farmer-centric solutions by creating an ecosystem whereby information sharing will play a critical role in devising better accessibility to farm inputs, as well as drive financial inclusion within the farmer community."
Shri Bajrang Alliance - Archit Goel, executive director and chief financial officer, Shri Bajrang Alliance
"The government has effectively addressed every area. While the rest of the world is moving toward recession, India is talking about progress and, as one of the youngest countries, is rapidly moving toward digitalization and universal access to education. We are thankful to the Government of India and the Union Budget for Various initiatives that have aided agriculture, which will benefit the FMCG sector like ours and consumer-friendly commodities."