Government’s Union Budget 2024 garners positive reactions for boosting consumption, supporting MSMEs and empowering workforce
The recently announced Budget 2024-25 has received acclaim from leaders in the retail industry for its balanced approach, focusing on both populist measures and progressive policy initiatives. Key stakeholders have highlighted the budget’s potential to stimulate consumption growth, support MSMEs and foster employment.
Kumar Rajagopalan, CEO of the Retailers Association of India (RAI), commended the government’s efforts to empower the middle class and rural population. He noted, “The government has tried to strike a balance between populist and policy measures. RAI appreciates the government’s focus on empowering the middle class and rural population. Initiatives such as monetary support for farmers, higher exemption limits in personal income tax and increased standard deductions will provide higher disposable income, leading to increased spending. We believe this will stimulate consumption growth, thereby boosting the overall economy.”
Rajagopalan also emphasised the positive impact of reduced duties on gold, precious metals and mobile phones, especially during the festive season. He highlighted initiatives for youth employment and skilling programmes as crucial for ensuring a future-ready workforce in the retail sector.
Rajagopalan added, “The budget’s emphasis on MSMEs and startups, including enabling more lending and abolishing angel tax, is a positive step towards realising their potential. Tax simplification and compliance, which are crucial needs of the hour, have also been addressed. Additionally, the Employment Linked Incentive, offering reimbursement to employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee, is a welcome move.”
According to Rajagopalan, the establishment of working women’s hostels and creches in collaboration with the industry is an essential measure for supporting women working in the retail sector. He noted that the focus on developing infrastructure for shopping in urban development is a significant step forward.
Rahul Mehta, Chief Mentor of the Clothing Manufacturers Association of India (CMAI), echoed similar sentiments, calling the budget pragmatic and innovative. He said, “This budget is extremely pragmatic and innovative in some of the bold decisions and directions it has taken to encourage employment directly. The steps include an internship scheme, the decision to reimburse one month’s wages for new employees and subsidies for employees earning over a lakh of rupees. These are excellent steps being taken.”
Mehta acknowledged that while the details are yet to be clarified, the measures will likely benefit the textile and apparel industry significantly.
“Furthermore, additional measures announced to support bank credits to MSME’s and easing of foreign investment will also benefit textile and apparel industry. The import relaxation in some of the important raw materials, trims and accessories required for garment manufactures will also help the garment manufacturers to be more competitive, especially in the export markets,” Mehta asserted.
In a statement from ONDC, the focus on MSMEs as part of the ‘Viksit Bharat’ vision was particularly highlighted. “It’s encouraging to see the government’s focus on MSMEs as part of the ‘Viksit Bharat’ vision. By emphasising the use of DPIs such as the ONDC Network, the government aims to drive overall economic growth while placing MSMEs at the forefront. The newly announced credit scheme for MSMEs is a significant boost to their growth prospects.”
The statement also pointed out the benefits of reduced TDS on e-commerce entities and the abolition of angel tax, which will improve cash flow for small businesses and incentivise their digital transformation. “Highlighting commerce and related services as a major government expenditure will prompt industry players to explore digital commerce opportunities more deeply. Reducing TDS on e-commerce entities is poised to improve cash flow for small businesses, incentivising their digital transformation. Additionally, the abolition of angel tax will provide a substantial boost to domestic startups.”
Overall, the retail industry views the Union Budget of 2024 as a well-rounded approach that promises growth, inclusivity and a brighter future for businesses and consumers alike.
