Bakery Biz, January-February, 2022
The Union Budget 2022 presented by Finance minister Nirmala Sitharaman offered a host of measures for a number of sectors, aimed at boosting growth amid high and rising inflation and continuing Covid uncertainties
There, however, were remarkably few changes to the personal income tax structure in a year that had seen demands from various quarters for some sort of relief or another in times of a pandemic.
Over the years, the union budget announcements are much eagerly awaited by various industrial bodies and organisations as it shows the outcome of their representations and expectations for support from the government. Various associations and elite groups of industry representatives present to the government their version of what could be beneficial for the industry to grow/survive.
The hospitality industry, which had been anxiously waiting for some sector-specific relief over the past two years, has welcomed the government’s move to extend the Emergency Credit Line Guarantee Scheme (ECLGS) up to March 2023 and earmark an additional Rs 50,000 crore for hospitality and related sectors.
But, most industry insiders thought much more could have been done to support the stressed sector, its allied segments and their workers.
The hospitality sector has, for a very long time, been asking the government to alter certain provisions to enable them to perform better. Likewise, the F&B segment too has its own set of requisitions which are made from time to time. Unfortunately, not much is done for this segment which is one of the larger contributors to the GDP and also gives employment to a substantial number of people.
Despite that not much direct support has been provided to the Bakery segment, the outlook for the Indian bakery industry has been quite optimistic, with the projected market value likely to surpass $12 billion by 2024, growing at a CAGR of 9.3 percent between 2019 and 2024.
“As it is a balanced, progressive and growth oriented budget, that is a huge positive. Overall growth will help all businesses to grow and also the baking industry,” said M.D. Vel, Director and Senior Consultant, INDIANFOODS Innovations ℗ Ltd (IFIPL).
Talking about the expectations from the budget, he said: “Well, it almost met my expectations! Would have liked a reduction in import duty for capital assets. However, there was no unpleasant surprises or new tax – as some of the previous budgets had.”
Talking about some segment-specific issues, Vel said, “there are few issues on retailing level – with multiple rates – creating confusion. For bakery goods, food, ice cream – packed, fresh, served with chairs, etc. Government should make paying GST and Taxes smooth with no pain or doubt. There shouldn’t be any doubt about the applicable rate. This gives room for mistakes by taxpayers
and arm twisting, and exploitive treatments by authorities.”
“Attitude and Culture! They need to shed the ‘whip-wielding’ ‘colonial masters’ attitude. Businesses and industries are paying GST and taxes to support India’s progress (for the growth of farmers and the agriculture sector also). So, the attitude and culture need to be with respect, for all businesses that practice integrity. The process needs to be kept simple, fair, transparent, smooth, digital. This approach will bring more business and people to pay, and collections will go up,” said Vel while talking about the expectations from the government.
