Budget 2019: Food-Startups Welcome Govt move of alleviating the stress of IT scrutiny

The consumption pattern in India is changing in last few years and the country is looking for a consumption-driven boost since ages. But the much-awaited budget of the Narendra Modi led government after its second stint brought disappointment for the restaurant as well as FMCG sector. Though, the industry expected subsidy for F&B industry where the government should have a look at the restaurants business where current GST rate of five percent does not allow restaurants to claim input tax credit (ITC) against taxes they pay on expenses such as rent and raw materials.

The sector also demanded a policy to reduce food wastage where the industry should move into adoption of frozen food to reduce food wastage and to preserve nutrition. Frozen food ensures lower food wastage as well as preserves nutrition with modern IQF technology. Our government should encourage the restaurant industry to ensure zero food wastage or even a scheme like Swachh Bharat Mission may be rolled out with 'zero food wastage pledge.’

"The Government, in this Budget, has kept "Gaon, Garib and Kisan" at the center of everything. Since we deal with agriculturally produced tea, which is a labor-intensive industry and one of the biggest employment generators in our country, such an approach will go a long way in helping the huge labor force working in the tea plantations based in remote locations across the country. Multiple initiatives have been proposed in this budget to double the farmers' income through various initiatives such as the creation of 10,000 new Farmer Producer organizations to ensure economies of scale for farmers over the next 5 years. Innovative pilots of “Zero Budget Farming” are to be replicated across the country for doubling farmers income and dairying through co-operatives are to be encouraged by creating infrastructure for milk procurement, processing and marketing. Such initiatives, if implemented will lead to the strengthening of the rural economy which in turn will result in the overall growth of the country. The new budget also was focused on encouraging ease of business for startups as the finance minister proposed easing the angel tax for startups. This coupled with a vibrant “Stand Up India” scheme will provide a boost to the start-up ecosystem in the country. Further, start-ups won’t be required to undergo scrutiny from the Income Tax department with a 2% interest subvention for a GST-registered MSME on fresh or incremental loans. There is a proposal also for a dedicated television channel for start-ups. A new payment platform for MSMEs is to be created with a plan to extend pension benefits to retail traders with an annual turnover less than Rs 1.5 crore. Overall it is a non-populist holistic budget keeping '5 Trillion Dollar Economy in next 5 years' in mind,” shared Kausshal Dugar, Founder, Teabox.

“Startups in India have faced the challenge of angel tax over the past year, and government’s announcements of alleviating the stress of IT scrutiny is a welcome step,” pointed Kabir Jeet Singh, Founder & Chief Executive Officer, Burger Singh by adding that India has the potential to become global startup hub, and we still have a long way to go in making this a reality. “The government should also consider easy availability of capital and government grants for the industry, along with an extended tax holiday,” he added.

Chef Ananya Banerjee says, "Under the Goods and Service Tax, the hospitality sector stands to reap the benefits of standardized and uniform tax rates, and easy and better utilization of input tax credit. As the final cost to end user decreases, we can expect the industry to attract more overseas tourists than before".

Commenting on the same, Pankaj Gupta from Taftoon said, “The budget 2019 is a great attempt by the government to bridge the rural-urban divide. Incentivising farmers through minimum support price, investing in farmer related schemes, creating a better distribution network will definitely boost the agrarian industry leading to better & diversified produce.” 

Commenting on the budget Saurabh Mehta, Owner at Mallacca Restaurant, Gurugramsaid, “The Budget is for farmers and rural India, startups and MSME are on central focus of the Budget 2019. He highlighted the key points, thus, there is good scope for farmers producer organisations; measures to allow farmers to benefit from eNAM; focus on zero budget farming - a new concept; ASPIRE, which will be good for food processing industry based on agriculture; Make in India with stress on MSMEs; and focus on availability of safe and adequate food.”  

Analyzing the Budget, Nitish Bansal, Owner at Judge and Jury Café and Bar, Delhi said, as expected, the Budget did not disappoint, rather the budget seemed holistic and aspirational that aimed to deliver economic growth. To being with the rural economy, the Budget announced modernisation schemes and focused on agricultural aggregation through setting up 10,000 new Farmer Producer Organisations. Setting up livelihood business incubators and technology business incubators to develop 75,000 agri-entrepreneurs is also a move in the right direction."

Union Finance Minister Nirmala Sitharaman, in her maiden budget on Friday, July 5, 2019, said the government will increase its focus on agriculture infrastructure will be the biggest move. "Zero budget farming will help double the farming income in days to come. This is also an attempt to make small-scale farming a viable vocation. Also, she stated about Jal Shakti, which I believe is the prudent step towards development and will surely manage water crisis and bring comprehensive development," said Vaibhav Arora, the owner at Pub Ji Café, Delhi.