Budget 2024: What retail, FMCG sectors expect from the Interim Budget

Interim Budget 2024: Growth and technological advancement is the crux of what the retail and FMCG (fast-moving consumer goods) sectors expect from Finance Minister Nirmala Sitharaman’s announcements on February 1. 

Yuvraj Shidhaye, founder and director, TreadBinary, said that Budget 2024 could offer incentives that could bolster technological advancements within the retail landscape. “My anticipation for the retail sector in 2024-25 revolves around the potential for fostering innovation and digitalization. I foresee the budget as a promising opportunity to offer incentives that could significantly bolster technological advancements within the retail landscape. Envisaging an environment conducive to growth, I anticipate measures such as streamlined regulations, increased support for research and development, and robust infrastructure development,” he added. 

Shidhaye said that these advancements could revolutionise retail through cutting-edge technology, ultimately enhancing customer experiences. “I'm hopeful for tailored measures that specifically cater to retail-centric initiatives, such as simplified tax structures, improved funding accessibility for digital transformation, and incentives promoting the integration of AI-driven tools. These envisaged provisions would empower us to innovate, optimize operations, and uplift the entire retail sector, potentially propelling unprecedented growth and delivering exceptional value to consumers,” he said. 

Balasubramanian A, Vice President, TeamLease Services batted for the simplification of GST for online and offline. “A unified and simplified GST regime can create a level playing field and boost compliance, potentially increasing formalization in the retail sector by 15-20 per cent, impacting the sector by Rs. 15,000-20,000 crore,” he said. 

He also pushed for greater FDI in multi-brand retail that could attract Rs 20,000-30,0000 crore in investments and create 1-2 million jobs. “ Improvement of logistics and delivery infrastructure across India can benefit both e-commerce businesses and consumers, potentially reducing delivery costs by 10-15 per cent and expanding the e-commerce market by Rs. 20,000-25,000 crore within 3 years,” said Balasubramanian A, adding further that the government must invest heavily in ONDC (Open Network for Digital Commerce) and digital infrastructure development. 

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FMCG

Adani Wilmar MD and CEO, Anghsu Mallick, said, “The FMCG sector is optimistic and looks forward to a market that is less volatile in 2024. The expectations from the upcoming Union Budget 2024 continue to be progressive, as we eagerly anticipate many transformative measures from it.”

Mallick said that the Budget 2024 offers a timely opportunity towards sustainable growth and empowerment, especially in the rural sector. He said that they expect rural demand to pick up and are expecting measures to boost consumption in these areas. 

“New policies are anticipated that safeguard the interests of oilseed farmers and the oleochemical industry while effectively addressing challenges faced by rural communities. This, in turn, will have a positive ripple effect on industries connected with rural landscapes. The thrust on capital expenditure would be welcomed, as it not only spurs economic growth but also ensures inclusive development,” said Mallick, who also called for investments in ONDC and digital public infrastructure. 

Balasubramanian A also said that there needs to be increased allocation for rural infrastructure. “Improved rural infrastructure like roads and cold storage facilities could enhance supply chain efficiency and reduce wastage, potentially increasing demand by 10-15% and generating 1-2 million jobs in construction, logistics, and related sectors. This could include jobs in building roads, operating cold storage facilities, and managing agricultural supply chains. MDs/CEOs of several prominent FMCG firms have already expressed concerns about the slowdown in rural demand,” he said. 

Support for domestic manufacturing, such as incentives for local production of raw materials and packaging through PLI scheme for food processing industry, direct benefit transfers, such as schemes like subsidies for LPG cylinders and Ujjwala Yojana,  labour laws to recognise the gig economy as a legitimate workforce a some of the other points highlighted by Subramanian A.

Reduction in import duties on components, extension of PLI schemes, focus on renewable energy, infrastructure development for rural markets, skillin initiatives, support for MSMEs are some of the other demands for the consumer durables, fashion, accessories and cosmetics, and e-commerce industries highlighted by retail experts.

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