The Union Budget 2024 brought cautious optimism to the Indian beauty industry. Its focus on MSME support, simplification of tax processes and skilling initiatives promises benefits for salon owners and entrepreneurs.
The Indian beauty industry is one of the most important sectors empowering women as well as entrepreneurship. Industry leaders were looking forward to Union Budget 2024 as the first budget presented by the newly-formed government, formed after the nail-biting elections. While the Union Budget 2024 did not bring about any drastic reforms, it also didn’t disappoint. Overall, it was a ‘play-safe’ budget that allowed the government to pacify tax-payers without ruffling many feathers.
Prior to the Union Budget 2024, the Hair and Beauty Federation India (HBF) had sent out a plea to the Finance Minister requesting for a reduction in GST, which is 18 per cent, in the salon sector.
The Union Budget 2024 majorly focussed on the following sectors:
- Agriculture: Focus on productivity and resilience with initiatives like natural farming, shrimp production and digital public infrastructure for farmers.
- Employment and skilling: Programmes to increase women’s workforce participation, support for new hires and extensive skilling initiatives.
- Social justice: Schemes for women, tribal communities and economically backward regions, including significant financial allocations.
- Infrastructure and development: Investments in industrial parks, urban development and energy security, along with support for MSMEs and critical minerals.
As Union Budget 2024 focuses on urban development, housing, infrastructure and manufacturing. It also focuses on tourism and is likely to boost the service sector indirectly. Increased opportunities for MSMEs, such as credit support, will help entrepreneurs and manufacturers make an impact on the growing Indian economy. Incentives provided for skilling programmes are also likely to have a positive effect on the beauty industry.
Simplifying the tax system is another significant improvement as a more straightforward tax process reduces bureaucratic hurdles. It enables business owners to concentrate on their primary business activities instead of dealing with complicated tax regulations. The budget takes initiatives to make tax compliance easier and less time-consuming. These are especially advantageous for small salon businesses that may not have dedicated financial teams. However, only time will tell how beauty entrepreneurs and aspirants are able to make the most of the opportunities provided in Union Budget 2024.
We got industry experts to comment on Union Budget 2024:
Sandeep Gidwani, Director, Shimmers Cosmetics
“We welcome the government’s visionary budget, which emphasises job creation, women’s empowerment, and MSME support. The increased provision of ₹3 lakh crore for schemes benefiting women aligns perfectly with Shimmer’s commitment to empowering women through our inclusive and sustainable beauty products. Additionally, the focus on manufacturing and skilling will undoubtedly benefit our industry, enabling us to innovate and expand our offerings while contributing to India’s economic growth. We’re particularly excited about the increased support for MSMEs, which will help us reach new heights in the beauty industry. This budget is a significant step forward in fostering a vibrant, inclusive and resilient economy. We look forward to being part of this transformative journey.”
Salon Consultant Chirag Manocha
“Union Budget 2024 has brought transformative measures for various sectors, including the salon industry. The increased Mudra Loan limits from ₹10 lakh to ₹20 lakh is a game-changer. This significant boost allows salon entrepreneurs to set up or expand their businesses with ease, ensuring better infrastructure and services. The budget’s emphasis on enhancing MSME credit access will enable salons to invest in high-quality products and modern equipment, crucial for staying competitive.
Moreover, the introduction of new credit guarantee schemes is a welcome relief. As budding entrepreneurs, gaining trust and financial support can be daunting. These schemes provide a safety net, fostering confidence among lenders and facilitating smoother loan approvals. This move addresses the common challenge of obtaining financing, helping salons to manage cash flow more effectively and invest in growth.”
He further elaborated that the enhanced credit support during stress periods, especially in the Special Mention Accounts (SMA) stage, is crucial. Salons often face financial turbulence due to fluctuating customer demand. This expanded support ensures that businesses remain afloat during tough times, preventing potential closures and job losses. The budget’s focus on supporting MSMEs during economic downturns ensures that salons have the resilience to navigate financial challenges.
“Finally, the allocation of ₹3 lakh crore for employment and skilling will have a lasting impact. This investment in human capital ensures a steady stream of skilled professionals for the salon industry, enhancing service quality and customer satisfaction. The budget’s support for vocational training and skill development programs will help create a more competent workforce, driving innovation and excellence in the beauty and skincare sector.
In essence, Budget 2024 offers a comprehensive support system for the salon industry, promoting growth, stability, and enhanced service delivery. The measures introduced will not only help salons thrive but also contribute to the broader economic development by creating jobs and supporting small businesses,” he concluded.