The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has received a warm welcome from the ecommerce and retail sectors, with industry leaders praising its focus on infrastructure, job creation, and support for MSMEs. The budget's comprehensive approach to bolstering digital commerce, fostering innovation, and enhancing economic growth has been lauded by key stakeholders.
The Open Network for Digital Commerce (ONDC) highlighted the government’s emphasis on MSMEs as a cornerstone of the ‘Viksit Bharat’ vision. The budget's support for MSMEs through the use of Digital Public Infrastructures (DPIs) like the ONDC Network is expected to drive overall economic growth. The introduction of a new credit scheme for MSMEs is seen as a significant boost, potentially improving their growth prospects and operational efficiency. Additionally, reducing TDS on ecommerce entities is poised to enhance cash flow for small businesses, incentivising their digital transformation. The abolition of the angel tax is also a welcome move, likely to provide a substantial boost to domestic startups by fostering a more conducive environment for innovation and growth.
Dhiresh Bansal, Chief Financial Officer at Meesho, emphasised the positive impact of reduced TDS rates on ecommerce operators. "Reducing TDS rates on ecommerce operators is a much-needed change which will enhance liquidity. Previously, small businesses had to wait a year to claim their refunds. This change will now lead to improved working capital efficiency, creating more parity between online and offline businesses," Bansal remarked. He expressed optimism about the budget's potential to spur economic growth and improve operational efficiencies within the sector.
Sandeep Aggarwal, Founder & CEO of Droom, praised the budget for its alignment with the vision of 'Viksit Bharat' by 2047. “The reduction of TDS rate on ecommerce to 0.1% and the decriminalisation of TDS delay are commendable moves that will simplify tax compliance and reduce the burden on businesses,” Aggarwal noted. He also pointed out the potential of dedicated ecommerce export hubs, set up in a public-private partnership (PPP) mode, to empower MSMEs and traditional artisans to access global markets. This initiative could significantly increase India's ecommerce exports, potentially reaching USD 350 billion by 2030, and positions India as a formidable player in the global digital economy.
Ajay Rao, CEO and Founder of Emiza, commended Finance Minister Nirmala Sitharaman's announcement of Ecommerce Export Hubs in the Union Budget 2024. He highlighted that the bonded zone structure of these hubs will streamline logistics, especially export clearances and warehousing, addressing re-import challenges directly. Emiza, with its expertise in warehousing, order fulfilment, and value-added services, is poised to contribute significantly. Rao also praised the private sector's role in developing these facilities, which will enhance efficiency and cost-effectiveness for Indian businesses while creating employment opportunities. He further noted that the government's plan to develop investment-ready "plug and play" industrial parks and 12 industrial parks under the National Industrial Corridor Development Programme will strengthen the logistics and e-commerce ecosystem.
Meanwhile, the retail sector too hailed the budget. Rishabh Sethia, Director & Business Administrator of MARS Cosmetics, warmly welcomed the Union Budget’s initiatives aimed at strengthening the MSME sector. He highlighted the financial support for 50 multi-product irradiation units as a strong commitment to enhancing MSME capabilities and competitiveness. The focus on labor-intensive manufacturing and the comprehensive package of financial and technological support will spur growth and innovation. Sethia also praised the increase in the Mudra loan limit to Rs. 20 lakh for successful borrowers under the Tarun category, empowering more MSMEs to expand operations, driving economic growth, and creating employment opportunities. Additionally, the abolition of the 'Angel Tax' is seen as a game-changer for startups and MSMEs, facilitating easier access to funding and encouraging entrepreneurship. Sethia affirmed that these measures create a conducive environment for business growth, significantly contributing to the country's economic development. MARS Cosmetics highly supports the government’s visionary approach and looks forward to leveraging these opportunities to deliver high-quality products to their customers.
Avneet Singh Marwah, CEO of SPPL, exclusive brand licensee of Blaupunkt TVs in India, appreciated the budget's strong commitment to job creation in the manufacturing sector. “The provision of targeted incentives for EPFO contributions and a substantial allocation of Rs 2 lakh crore towards skilling programs demonstrate a strategic approach to meeting employment needs in our rapidly evolving economy,” Marwah stated. He highlighted the budget’s support for MSMEs through the introduction of a credit guarantee scheme, designed to enhance the financial stability and growth potential of these vital enterprises. Marwah also noted the budget's focus on the middle class through tax relief measures, such as an increase in the standard deduction for salaried individuals and additional benefits under the new tax regime, aiming to boost disposable income and stimulate consumer spending.
Pradeep Bakshi, MD & CEO of Voltas, emphasised the budget’s forward-thinking approach benefiting the consumer durables industry and bolstering sustainable development efforts. “The full exemption of customs duties on 25 critical minerals, including lithium, copper, cobalt, and rare earth elements, is a substantial boost for sectors reliant on these materials, such as high-tech electronics and renewable energy,” Bakshi remarked. This policy is expected to enhance the availability of these essential resources, stimulate domestic processing and refining capacities, drive innovation, and reduce costs. He also highlighted the budget's emphasis on energy transition, including the expansion of exempted capital goods for solar panel manufacturing, aligning well with Voltas' commitment to sustainability. The substantial investment in manufacturing presents a promising outlook for the industry, and Voltas is optimistic about the positive impact of these policies on the electronics sector.
Overall, the ecommerce and retail sectors are optimistic about the Union Budget 2024’s potential to drive growth, improve operational efficiencies, and position India as a global ecommerce hub. The comprehensive focus on infrastructure development, digitalisation, and skill enhancement is expected to foster innovation, support MSMEs, and contribute to the nation’s economic development. Industry leaders have expressed their commitment to leveraging these initiatives to drive growth, innovation, and sustainable practices within the sector, ultimately contributing to India’s ambitious growth goals and positioning the country as a major player in the global digital economy.
