NuFFooDS Spectrum brings to you the industry expectations of the Union Budget 2021-22
The Union Budget for 2021-22 is all set to be presented on February 1, 2021.
What is likely to be announced and what not will be answered soon. Nevertheless, the industry is ready with its bag of expectations.
NuFFooDS Spectrum brings to you the industry expectations of the Union Budget 2021-22-
“Initiate PLI scheme specifically for Herbal and Nutraceutical Industry”
We expect the government to primarily focus on R&D and innovation in this Union Budget 2021. Our ask from the government is based on four pillars, which will empower the nutraceuticals industry in India:
– Establish a cross-ministerial task force under a Joint Secretary at the Ministry of Commerce and Industry that creates a plan and sets a goal to make nutraceutical into a $25 billion industry by 2030 and leverage the huge domestic and export potential that the AYUSH, Herbal and Nutraceutical industry offers.
– Institutionalise a PPP model to contribute monetarily and non-monetarily towards R&D and innovation needed at all levels of research, technology and manufacturing in AYUSH and Herbal sector.
– Funding support for MSMEs either at a zero percent or low rate of interest and tax incentives for investments made in R&D and Innovation.
– Initiate Bulk Drug Parks & Production Linked Incentive (PLI) scheme specifically for the Herbal and Nutraceutical Industry.
All these will contribute to $25 billion revenue generation for the industry by 2030 that currently stands at ~$5 Bn and a 15-20% Y.o.Y growth. The industry’s growth will also lead to multiplying farmers’ incomes by 4x and India becoming the No.1 source for export of top 20 herbal extracts.
Sanjaya Mariwala, Founder & President, Herbal and Nutraceutical Manufacturers of India, Mumbai
“Reduction in GST rates of natural and healthy products”
With COVID last year, FMCG sector saw an impact on the consumer demand. I would want the Government to boost consumer demand by the reduction of personal taxes leading to an increase in their disposal incomes. This would increase the consumerism and overall growth. As per Nielsen report, Rural India contributes 36% to overall FMCG spends and has been growing 3-5 percentage points faster than urban spend in the past decade. Thus, government should focus on building infrastructure projects which would create more jobs and boost the consumption. Moreover, with Atmanirbhar Bharat, the Government should promote local production and bring out incentives which would lead to self-reliant India. Also there should be a reduction in GST rates of products that are natural and healthy such as dates, almonds, etc.
Pankaj Mishra, CEO, Apis India, New Delhi
“Providing funds for Ayurvedic practitioners and centers”
During the pandemic, PM Modi has given the much-needed push to the domestic Ayurveda sector as he encouraged the world-class R&D enablement and manufacturing capabilities of India. The healthcare sector is looking forward to more promising announcements from Budget 2021. We are expecting the GST to be brought down from the current 12% which is levied on products that have the license to sell as Branded Ayurvedic Medicines. This will further help with cost reduction and easy accessibility of the product. The government can also look at providing funds for Ayurvedic practitioners and centers, which will further encourage the domestic and offshore investors to put faith in India for new product developments.
Vishal Kaushik, Co-Founder and MD, Upakarma Ayurveda, New Delhi
“Capacity building in food processing sectors”
The government has been proactive in initiating farm reforms and modernising the agri sector. It is equally important to win confidence and support of the farmer community – towards that end, we expect to see more budget allocations and measures to bolster farmer income, with better access to credit and markets. We also expect a concerted effort from the central and state governments towards capacity building in agri and food processing sectors – incentives to build more modern pack houses, weatherproof warehouses, integrated cold chains, technology and data-mining to support supply chains and more. We need sharper focus on value addition in these sectors so that they become a key enablers of the government’s vision of farmer empowerment. We also urgently need easing of duty structures and regulations on export of fresh produce – this can build a positive momentum to make our agri economy more export-oriented.
Akshaya Kamat, Director, Pioneering Ventures, Mumbai
“Stimulus packages in the form of low income tax slabs”
As the COVID-19 pandemic resulted in job-losses especially of our rural consumers, we want stimulus packages in the form of low income tax slabs, job-creation and incentives in this budget. Even Nielsen’s data shows overall FMCG sales growth fell from 16.2% annually in the September 2018 quarter to 7.3% in the September 2019 quarter, with rural consumption at the slowest in seven years. Government should also announce some initiatives to strengthen paid-work support programs like MGNREGA and others so that rural people can have some disposable income to spend on their consumption pattern ahead of essentials. This move will no doubt promote consumerism but also will boost overall GDP growth. More finances should be allocated on building roads, housing and new factories, which will also generate income opportunities for our rural consumers and bridge the gap to have last-mile consumption.
Amrinder Singh, Managing Director, Bonn Group of Industries, Ludhiana
In the coming budget 2021, the government needs to focus on three issues mainly. First, keeping in mind the headwinds that the FMCG sector and indeed the larger economy faced during the pandemic, the government needs to give a vigorous push to the overall economic activity which would generate more employment which in turn would generate income leading to an increase in demand for FMCG products. Secondly, particularly for food FMCG, the government needs to allocate more funds for agriculture, food processing and strengthening of the entire value chain which would increase farmers’ income while raising the productivity and output of the sector. The government should also restore the input tax credit for food services. And thirdly, the budget should provide for tax incentives on exports of agricultural and food items.
Shyam Sunder Aggarwal, Managing Director, Bikano, New Delhi