Budget expectations 2022: What do DTC brands and small businesses want?

(Last Updated On: February 1, 2022)

Get ready for the Union Budget 2022 that is going to be announced by our Finance Minister Nirmala Sitharam on February 1. If last year’s budget was designed to help the economy recover, the upcoming budget should focus on driving growth. Like every year, this year too, we outlined key budget expectations that small businesses and DTC brands have from the Narendra Modi Government. Let’s get started. 

What do DTC brands and small businesses want?

1. GST rationalisation and compliance burden reductions

Keeping up with GST requirements, licensing, audits and loans can be quite challenging. If you find these things confusing, the budget for 2022 could solve some of your problems. If you are a small online business owner with an annual turnover of less than ₹40 Lakh, you may not need to go through a mandatory GST registration.
Although several small DTC brands are already exempt from GST, the return filing process and the entire structure of GST can be difficult to navigate for a small business. Also, the amount of paperwork that online businesses need to undertake is way too much.

“Inability to handle GST compliance costs has disabled millions of self-employed women/self help groups and artisans from selling their produce online especially during the Covid pandemic. It is crippling. Both the offline and online sellers should be allowed to sell without GST registration below the prescribed threshold,” – Federation of Indian Micro and Small & Medium Enterprises

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2. Better infrastructure so more brands can reach more people around India

Experts suggest that the union budget 2022 would focus on infrastructure in the country to help revive the Covid-battered economy. Good infrastructure can become an engine of growth for the small business and DTC eCommerce sector.
Key infrastructure ministries slated to receive investments are; Roads, Transport and Highways, Railways, Shipping Ports and Waterways and Telecommunications. All these industries form critical parts of a DTC eCommerce brand’s supply chain. 
DTC brands are hoping for better roads, railways, warehousing, cold storage facilities and shipping ports so that they can ensure on-time deliveries and hassle-free returns. They are also hoping to expand to more customers pan-India. 
We expect the upcoming Budget to focus on increasing digitisation in Tier-II+ cities of India. Young Indians from these regions have started adopting e-commerce extensively and if the government continues to focus on the infrastructure, there is immense growth potential. – Kapil Makhija, CEO, Unicommerce
Developing the logistics and delivery infrastructure in tier 2 and tier 3 cities can also encourage more people to start their own independent eCommerce businesses.
budget expectations 2022
Source: CII

3. Support for start-up India initiatives so more DTC brands can become unicorns

Calling this decade the ‘techade’, Prime Minister Narendra Modi has declared January 16 as the ‘Startup day’ in India. He recently outlined three important steps that the government would take through initiatives like Startup India to support the entrepreneurial ecosystem –
1. Easier government and bureaucratic processes for startups. This would encourage and help more individuals in starting their own businesses.
2. An institutional mechanism to facilitate innovation
3. There would be additional support from the government for young innovators and entrepreneurs.

For SMB to survive and thrive, a greater impetus is needed to provide digital tools, training and guidance. Our expectation from the union budget is financial support/incentives, particularly for small and medium-sized businesses, to help accelerate the digital India vision. – Punit Sindhwani, CEO, Paxcom

What are DTC entrepreneurs expecting from Budget 2022? 
1. Reduced taxes keeping in mind the rising prices of fuel and diesel
2. More investments in tier 2 and tier 3 cities
3. State-run incubators to encourage innovation
4. Tax SOPs or benefits during mergers & acquisitions especially for startups in the retail and service sector
5. Strengthening our digital infrastructure so that small DTC brands can expand their business operations to more cities
6. Providing support in the form of digital management techniques
7. Incentives and support in the form of inventory management and adoption of fintech services
Going forward, the government needs to make capacity-building a focal point in their budget allocation for Indian entrepreneurs so that more DTC brands can enter the unicorn club.

4. Skill development for entrepreneurs

If India wants to become a $5 Trillion digital economy, it needs to have a competent and skilled workforce. Small businesses and DTC brands are expecting considerable budget allocations towards:
  • Digital literacy
  • Linguistic ability
  • Cultural employment
The pandemic shifted the world online and digital skills are just not optional anymore. Reports suggest that 2022 will see the rise of ‘microtask outsourcing’. And as we inch closer to the ‘Digital India’ dream, relevant skill development could generate up to 90 million jobs in India!
Industry experts are hoping for announcements of initiatives like the New education Policy or the Pradhan Mantri Kaushal Vikas Yojana to help foster entrepreneurial and digital skills in the hinterland. 
Instamojo strongly believes in empowering small businesses across India. Instamojo’s learning platform for forward-thinking SME’s and entrepreneurs – mojoVersity, provides free, simple and easy upskilling for small business owners. 

Budget 2021 recap: 

Did we get out expectations right in 2021? Or did we aim too high? Watch this video to find out! 

Some of the key deliverables of the Union Budget 2021 were:

  • A 2x increase in the amount allocated for the MSME sector from 2020.
  • The State releases a ₹20 Lakh Cr Atmanirbhar Bharat Abhiyan that had several benefits like:
  • Collateral-free loans were given to MSMEs with an annual turnover of ₹100 crores.
  • ₹1500 Crore scheme released to promote digital modes of payment
  • Allocation of ₹20,000 crores to help MSMEs repay existing loans
  • Creation of ₹50,000 Crore ‘Fund of funds’ to help MSMEs with technical capacity building and driving innovation
  • Revised definition for the term ‘Micro-enterprises’

Even though some expectations were not met, the budget in 2021 was largely focused on recovery. Let’s find out what Budget 2022 has in store for us!

Communication is key! 

Did you know that the government of India allows you to contribute to various discussions and important topics? Visit MyGov to see a variety of open topics that you can share your opinions or concerns.

What does your small online business need from the Government? Tell us in the comments below!

Also, follow our Twitter handle for LIVE Union Budget 2021 updates.


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