Reactions from industry captains on announcements in the current Budget that will have a bearing on the fashion retail industry
New Delhi: Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023, the fifth budget of Modi 2.0 on February 1, 2023. In the last full-fledged Budget before the general elections next year, Sitharaman presented a budget that many consider could lead India onto the growth path of the future. Sitharaman announced major changes in tax slabs under the new tax regime that would put more money into the hands of the middle class and that brings cheers to many businesses from FMCG companies to retailers.
This Budget hopes to build on the foundation laid down in the previous Budget, and the blueprint drawn for India@100. “We envision a prosperous and inclusive India, in which the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes,” said Finance Minister, Nirmala Sitharaman in her Budget speech.
She further added, “In the 75th year of our Independence, the world has recognised the Indian economy as a ‘bright star’. Our current year’s economic growth is estimated to be at 7%. It is notable that this is the highest among all the major economies. This is in spite of the massive slowdown globally caused by Covid-19 and a war. The Indian economy is therefore on the right track, and despite a time of challenges, (is) heading towards a bright future.”
In a series of stories, IndiaRetailing brings you the opinion of leading industry experts on the Union Budget 2023. In the fifth article of the series, we feature reactions to announcements concerning the fashion retail industry.
Akhil Jain, executive director, Madame
Carrying forward the momentum of the last year, the Union Budget 2023-2024 is growth-oriented with an impetus on capital expenditure to fuel economic growth and employment generation. The garment industry was looking forward to the announcement of some measures for ease of doing business, reduction/rationalization of GST rates, removal of blockage of GST input tax credit, reintroduction of Technology Upgradation Fund Scheme (TUFS) and the next version of Production-linked incentive scheme (PLI). However, these do not appear to have been made part of the Budget announcements. The garment industry is looking forward to seeing some measures soon in this regard as well.
Amit Pratihari, vice president, De Beers Forevermark
The budget has a positive sentiment, overall. In fact, under the new tax regime, the budget has made room for more disposable income and purchasing power of consumers will increase.
For natural diamonds, we’ve seen an encouraging trend over the past few months where consumers are purchasing items that hold meaning and value. Natural diamonds continue to be sought after due to their inherent preciousness. Pricing has also remained steady, and we are optimistic it will become stronger. As customers continue to value what is natural and genuine, diamonds will always be in demand.
Pawan Gupta, director, PP Jewellers by Pawan Gupta
The government needs to understand the negative impact of higher import duties on the jewellery business such as a rise in smuggling and corruption. Higher import duty will also subsequently make it difficult for a small-pocket household to purchase gold.
We were hoping that the government would propose a duty reduction which is the need of the hour to make both trade and consumption of gold and silver easy and fair.
We are happy to hear some reduction in the taxes levied, people could now have more money to spend, which in turn would give the economy the boost it needs. India’s growing middle class is expected to drive demand for jewellery. With a growing population of young, urban consumers, the jewellery sector is poised to benefit from an increase in disposable income and a desire for luxury items.
The Indian government has announced to encourage the indigenous production of lab-grown diamonds, a research and development grant is to be provided to one of the IITs for five years, the policy is expected to address issues such as quality control, branding and marketing, and the development of human resources.
