Finance Minister Nirmala Sitharaman will unveil the Union Budget 2024-25 on February 1, 2024. Recently during the CII Global Economic Policy Summit the finance minister said that she will only announce a ‘vote on account’ interim budget.
She further said, “We are in election mode and the elections will happen around April-May 2024. So the budget that the government presents would just be to meet with the expenditure of the government till a new government comes into play, so no spectacular announcements will be made at that time. You may have to wait till after the new government comes in and the next full Budget will be presented in July 2024. So the industry needs to wait till July 2024. However, nuFOODS Spectrum spoke with a few people from the food industry to know about their expectations from the Budget 2024-25.
Sharing his views about the industry expectations, Indraneel Chitale, Partner, Chitale Bandhu Mithaiwale urged, “The government should initiate unified GST for all foods, decluttering of compliances to single authority like the Food Safety and Standards Authority of India (FSSAI) and additional incentives for promoting and boosting exports.”
Stressing on the importer and exporter issues, Vikas Motiram Koli, Chief Executive Officer, F G Agro & GroKisan Agrotech said, “ I anticipate that the government in its budget for the import-export sector will likely underscore the importance of local sourcing and global network optimisation. In response to the growing emphasis on sustainability and efficient supply chain practices, I expect the budget to introduce tax incentives or subsidies for import-export companies actively engaging in local sourcing initiatives. Simultaneously, the government may allocate resources to enhance global network optimisation, investing in technologies that improve logistics, transportation efficiency, and overall supply chain resilience. Staying attuned to these budgetary priorities will be essential for import-export companies to align their financial strategies with government initiatives, fostering competitiveness and sustainability in an evolving global marketplace.”
With a market size of $ 866 billion in 2022, the food industry will play a vital role in the economy’s growth. The domestic food market is projected to grow by over 47 per cent between 2022 and 2027, reaching $ 1,274 billion. In 2023, the food market will generate $ 963 billion in revenue and the market is anticipated to expand at a CAGR of 7.23 per cent between 2023-27.
Looking at the huge market potential for the food industry, which needs immediate government attention, P C Musthafa, CEO and Co-Founder, iD Fresh Food said, “As a fresh food company, we eagerly anticipate the Budget for the fiscal year 2024-25, with policies that will foster the growth of the food industry”.
His priorities include: Easy Sourcing of Raw Materials – Streamlining processes for acquiring raw materials can enhance
operational efficiency and contribute to cost-effectiveness.
Affordable Pricing of Raw Materials – A focus on policies that ensure reasonable and stable pricing for raw materials is crucial for cost management and sustainability. Increased Inter-State Business Options – Facilitating easier interstate trade can open up new markets and opportunities for growth, contributing to the expansion of the food industry. Relief from Stringent Cross-Border Policies – Simplifying and easing regulations for cross-border business can enhance international trade and collaboration, fostering industry growth. Easing Payments for Purchasing Stocks – Providing mechanisms or policies that ease the financial burden of purchasing large stocks can support businesses in managing inventory and responding to market demands effectively. These expectations align with the broader goals of fostering a favourable business environment, encouraging growth, and ensuring the sustainability of businesses in the food industry.
Expressing this wish list for the food processing industry, Nilesh Lele, President of the Chamber for Advancement of Small & Medium Businesses said, “The budget allocation for the food processing industries in the fiscal year 2024-25 is anticipated to surpass the previous year’s figure, which stood at Rs 3287.65 crore in the 2023-24 budget. This upward trajectory is attributed to the remarkable advancements and substantial growth prospects within the food processing sector, creating opportunities for foreign investors and startups. Anticipating the potential to generate nine million jobs by 2024, there is a call for a higher budget to support the industry and expansion and capitalise on its economic and employment potential.”
The India organic food market size reached US$ 1,582.2 Million in 2023. Looking forward, IMARC Group expects the market to reach US$ 8,918.5 Million by 2032, exhibiting a growth rate (CAGR) of 21.19% during 2024-2032.
The growing awareness regarding the health benefits of organic food products, growing consciousness regarding the health hazards associated with chemical pesticides and fertilisers, and increasing investments by Indian corporate firms in agritech, agribusinesses and organic farming represent some of the key factors driving the India organic food market which reached $1,582.2 million in 2023. It is estimated to see over 20 per cent growth in the coming years.
Hence, Gaurav Manchanda, Founder & Managing Director, The Organic World, observed “We hope to see support for sustainable agricultural practices and incentives for organic farming initiatives. Strategic measures aimed at fostering a healthier and more environmentally conscious food industry would further bolster our mission to provide quality organic and natural groceries. We believe that government initiatives in this direction will not only benefit our business but will also contribute to the larger goal of creating a more sustainable and resilient food ecosystem for generations to come”.
Sharing his thoughts Bharat Sawnani, F&B Consultants, Elevantus said, “The Indian economy’s new growth forecast says that we will grow by 7 per cent, an increase from the previous 6.5 per cent buoyed by factors such as rising rural consumption and increasing capital expenditure. I hope that we can curb the rising inflation, driven by food. India’s retail inflation surged to 5.55 per cent in November, food inflation was 8.7 per cent, and vegetable inflation was a staggering 18 per cent. The budget should keep improving the manufacturing sector to generate more rural, and semi-urban jobs. Also, the budget should carry forward the improvements in ease of doing business by reducing the compliance burden.”