From amending 42 central laws to making the Permanent Account Number (PAN) a common identifier, the finance minister (FM) announced a series of measures in the parliament on February 1, 2023
Amid the growing fears of a slowdown and global recession, the Union Budget 2023 presented by Nirmala Sitharaman on February 1st, 2023, has taken measures to support the direct-to-consumer (D2C) sector in India.
From amending 42 central laws to making the Permanent Account Number (PAN) a common identifier, the finance minister (FM) announced a series of measures in the parliament.
One of the major announcements was the reduction of compliances to enhance the ease of doing business.
“For enhancing the ease of doing business, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalised. For furthering the trust-based governance, we have introduced the Jan Vishwas Bill to amend 42 central Acts,” the FM said, adding that the Budget proposed “a series of measures to unleash the potential” of the economy.
The Jan Vishwas (Amendment of Provisions) Bill, 2022, was introduced in Lok Sabha on December 22, 2022. It amends 42 acts to reduce the compliance burden on individuals and businesses and ensure ease of doing business.
The government has also proposed the permanent account number (PAN) as a common identifier for business establishments. The PAN will be used as a common identifier for all digital systems of specified government agencies, bringing ease of doing business and it will be facilitated through a legal mandate.
The budget also focused on making the procurement of documents convenient for business entities and announced that the scope of services in Digilocker will be expanded.
The FM said, “A one-stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators and regulated entities will be established using DigiLocker service and Aadhaar as foundational identity."
While talking about the Budget 2023, Abhay Batra, co-founder and chief financial officer (CFO) of Clovia highlighted, “It is encouraging to see that key pillars of growth include skilling and job creation, opportunities and reduction of compliance burden for small entrepreneurs, and the empowerment of women entrepreneurs. This is consistent with our expectations of including incentives to enable the empowerment of women entrepreneurs in tiers II, III and IV.
The Budget proposed sector regulators bring reforms in their respective areas after thorough consultations with stakeholders in a timebound manner.
"To simplify, ease and reduce the cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For this, they will consider suggestions from public and regulated entities. Time limits to decide the applications under various regulations will also be laid down,” FM said.
"Measures such as the extension of the tax benefit eligibility to start-ups incorporated before April 1, 2024, show a commitment to creating a more favorable environment for start-ups, enabling us to take bigger risks, innovate and contribute to the economic development of the country," observed Vinit Garg, founder and chief executive officer (CEO) of Mylo.
The Budget also raised the threshold limits for presumptive taxation schemes. “In order to ease compliance and to promote non-cash transactions, it is proposed to increase the threshold limits for the presumptive scheme of taxation for eligible businesses from Rs 2 crore to Rs 3 crore and for specified professions from Rs 50 lakh to Rs 75 lakh. The increased limit will apply only in case the amount or aggregate of the amounts received during the year, in cash, does not exceed 5 per cent of the total gross receipts/turnover,” Sitharaman said.
"We welcome the Central government’s vision to boost the agricultural sector with a thrust upon the growth of agri-tech start-ups. Setting up the agricultural accelerator fund will pave the way to attract fresh ideas, tech-driven solutions and increased use of technology in the agricultural sector. This will play a key role in increasing production, reducing production costs, reducing wastage and helping farmers gain higher returns," asserted Shan Kadavil, co-founder, FreshToHome.
Deepak Gupta, co-founder and chief operating officer (COO) of Bombay Shaving Company however had mixed reactions about the Budget 2023. He was glad that the government recognises the important role of start-ups, MSMEs and entrepreneurship in nation-building, especially in the last few years. “However, given the global economic outlook, and uncertainty brought on by the funding winter, I would have liked to see more constructive measures incentivising India-born companies making for India, thereby reducing external dependencies in the long run,” he noted.
In conclusion, the Union Budget 2023 presents a positive outlook for the D2C sector in India. The reduction in compliances, the tax incentives for companies that invest in start-ups, promoting entrepreneurship and digitalisation. The measures proposed in the Union Budget 2023 will help to provide better opportunities for companies in the D2C sector and help to support its growth.