No Sector Specific Budget for Restaurants, F&B; ITC, Single Window Clearance a Miss

No Sector Specific Budget for Restaurants, F&B; ITC, Single Window Clearance a Miss

Restaurant Industry that has been waiting for the budget seeking some sector specific relief is again left disheartened with no specific budget allocated for the growth of the sector. Though, the budget has contingency plan for the hospitality sector which was much required but there’s lack of awareness among startups and SMEs on how to access the same.

“Union budget 2023 is out, retail industry was expecting few direct SOPs which were a complete miss from the budget, especially around Input tax credit. Keeping a positive view I see measures for bringing more cash flows in hands of individuals through relaxed tax sops, this will certainly have a direct bearing on their spends and we see this as a small window of opportunity which can benefit the retail sector with increased spending,” shared Rajat Agrawal, CEO, Barista.

Also, it’s been 3-4 years that the sector is asking for restoration of Input tax Credit on GST, Ease of Doing Business that includes over licensing and regulation hurdles in the smooth operation of the sector, and also a fair and equitable eCommerce policy for the survival and revival of the restaurants.

“We were hoping that in this budget, some critical issues such as the introduction of ITC (input tax credit), liquidity focused credit lines and single window clearance for all restaurant licenses will be looked into. It would have helped if the government would, have addressed the issue of unemployment in the hospitality sector and introduced healthy regulations in place to improve the ease of doing business and helped to generate employment in the sector,” added Teja Chekuri, Managing Partner at Ironhill India.

Commenting on the same, Vandita Purohit, Founder, Mauji Café pointed, “It's great that this budget has a contingency plan for the hospitality sector which was much needed. But, there is still a lack of awareness amongst hospitality startups with respect to how to access this for the larger benefit of the hospitality ecosystem and our economy. We appreciate this step taken by the govt of refunding 95% if the MEME startup fails, but this can also have a lot of unforeseen drawbacks for the last mile startups.

She was also of the view that MSME is a very vast category to build the budget around and it should be bifurcated according to industries so that not only one but all industries benefit from the govt offerings.

Good News Pouring in for Digital and Food-tech startup

“The budget hits all the right notes for Agritech, Foodtech and the overall startup ecosystem in India. The focus on development of vital infrastructure like railway and highways would help improve the logistics requirements of the Agri and Industrial sector. The particular focus on Green growth as well as on Millets is welcome. India is the largest producer of millets in the world and this particular focus on millets will help both domestic as well exports of millets and value added millet products,” pointed Abhishek Sinha, Co-founder, GoodDot that is one of the first vegan brand in the country.

Adding to the same, Viren D'Silva, Co- Founder at GOOD FLIPPIN’ BURGERS® shared, “It's very good news for startups that Government has extended the tax holidays by one year, i.e, till March 2024. We were hoping the government would also increase the total turnover by Rs 50 cr from the earlier 25 cr. This would have been a booster dose for startups who were incorporated after 2017 and faced the tough time.”

Also, in order to unleash innovation as well as research by start-ups, the Government has proposed a National Data Governance Policy to allow access to anonymized data. This is a great step to enable data driven R&D in the country.

“The first Budget in ‘Amrit Kaal’ comes with some major announcements w.r.t. the startup ecosystem as India is now the third largest ecosystem for start-ups globally. The Honorable Finance Minister proposed to extend the ‘date of incorporation for income tax benefits to startups’ from 31.03.23 to 31.3.24. The proposal will indeed encourage budding entrepreneurs and startup founders. Benefit of carrying forward of losses on change of shareholding of startups has been extended from 7 years of incorporation to 10 years, which is going to benefit the founders in multiple ways,” added Prerna Kalra, Co-founder and CEO of Daalchini Technologies.