Budget 2023: Proposals give wings to retail sector to soar to newer heights

Veena Ashiya • February 2, 2023, 19:57:49 IST

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Relaxation of tax provisions and the increased cash flows in the hands of individuals is another boon for the industry

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Budget 2023: Proposals give wings to retail sector to soar to newer heights

With the much-awaited Union Budget 2023 finally out, we are happy to witness a positive consideration by the government of India for the retail sector once again. I thank Finance Minister Nirmala Sitharaman for the announcement in favour of the startup ecosystem.

Boost to startup sector

Given that India is expected to be one of the booming economies in the coming fiscal year, the decisions taken for the retail segment will help businesses leapfrog to newer heights. Union Budget 2022 already saw favourable moves for the startups, including standardisation and removal of overlapping compliances. As the industry has been seeing an increase in competition, the expectations have been met with added tension.

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Cure for D2C brands in Budget

The initiatives announced in Budget 2023 will help businesses extend their presence to tier 2 and tier 3 cities as well. Along with this, the decision to further strengthen the 5G supply and the support for digitization promises a growing cure for D2C brands that are reliant on e-commerce supply and automation.

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The finance minister stated, “Digital payments continue to find wide acceptance. In 2022, they show an increase of 76 per cent in transactions and 91 per cent in value. Fiscal support for this digital public infrastructure will continue in 2023-24.”

Leg-up to emerging businesses

The decision for extending the date of incorporation for income tax benefits to startups for a year and the proposition to provide the benefit of carrying forward losses on change of shareholding of start-ups from seven years of incorporation to ten years will reinforce the budding businesses in India.

The relaxation of tax provisions and the increased cash flows in the hands of individuals is another boon for the industry, which sees a direct relation to spending habits. This can be envisioned as a great opportunity to benefit the retail segment with increasing purchasing power. The additional announcement of the Corpus for credit guarantee scheme being revamped to Rs 9,000 crore will allow collateral-free credit of almost Rs 2 lakh crore to the MSMEs and is a major win for the industry.