Budget is one such thing that elicits a lot of discussion and opinions from the retail industry. With the union budget 2010-11, hopes spring that the retail industry’s budget outlook would aid the essential reforms and facilitate the sector to grow.
Recognition to the industry
The retail industry is steering ahead smoothly and is also gaining a lot of significance the world over. The government should offer the required impetus for it to reach greater heights. Mohit Khattar, Managing Director, Godrej Nature’s Basket believes that the retail sector needs to get its deserving recognition. He says, “Recognition to retail as an industry per say is a must. This will substantially help augment funding requirements and help in the growth of the sector.”
Technology, which is an essential part of the retail industry is also expecting things to change and sway in its favour leading to an augmentation as well. Rajiv Bhalla, Country Head (Sales & Marketing), NEC India expressing his aspirations from the budget says, “We foresee a progressive budget that assures healthy growth of the economy and a greater consideration to the use of technology for the betterment of the society as a whole. The Budget should pave the way for investment-led growth and stimulate demand through fiscal measures. The Government's policies and tax structures must be attractive enough to encourage investments in the hotel sector. This in turn will empower hoteliers to look at adopting technology to enhance productivity, ensure customer satisfaction and reduce operational costs.”
Relaxation of FDI
FDI is an issue that has been a hot topic in retail for a really long time. India presently has the largest retail industry in the world and the easing of the FDI would only help it achieve greater heights. However, it is still a dormant issue. Currently, India does not allow FDI in multi –brand retailing while in single brand retail there is a 51 per cent limit on FDI. For wholesale cash-and-carry model 100 per cent FDI is permitted. Khattar feels, “Allowing FDI in multi brand retail will bring in greater efficiencies and effectively help lower prices, improve product quality and improve the sheer choice of products to the end consumer. The government also needs to bring in transparency on applicability of press notes 2, 3 and 4 of 2009 for the retail industry. These notes deal with the calculation of FDI in step down subsidiary of an Indian Investing company having FDI.” With respect to FDI in real estate, Kamal Taneja, Managing Director, TDI Infrastructure Ltd says, “A 100 per cent FDI in real estate has put the India real estate market on the global map with large corporations betting big on Indian market and queuing up for increased investments. We wish for similar sweeping reforms in the retail real estate as well. FDI in retail can have some positive results on the economy, triggering a series of reactions that in the long run can lead to greater efficiency and improvement of living standards, apart from greater integration into the global economy.”
The retail market in the country is expected to grow to $590 billion by 2012. If the industry speculations get a go-ahead then probably we would be able to look at bigger numbers! Let’s wait and watch!