It’s just a matter of few days and our Finance Minister Arun Jaitley will unveil the much awaited Union Budget for the coming fiscal. As the NDA Government is more inclined towards boosting the startup ecosystem in the country, some of country’s traditional brick-and-mortar retailers expect that the government will have something in plate for them as well.
Though, retailers have seen a spike in sales and revenue in 2015, but still there are certain loopholes which they would like to seal leveraging some sustainable retail policies. Indian offline retail has always been the backbone of country’s economic stature and hence it is equally important for the government to work toward the helm of this industry.
As we all, desperately await the Union Budget to roll-out, here is what some of country’s offline retailers expect from the forthcoming budget:
Arun Ganapathy, CFO, Spykar Lifestyles Pvt Ltd.
“Currently, the industry enjoys concession in terms of excise duty and no sales tax on fabrics & the same should continue. To promote ‘Make in India’, there has to be higher taxation on imports of garments. The expectation is to address the problems of the Textile & Apparel sector, at large. Additionally, the aam addmi in the street should receive a better cash flow.
Unless the cash position of the end consumer improves, we being in the discretionary spend sector will face headwinds in our growth journey. It is most imperative that the budget doesn’t tax too much and the consumers are optimistic of the economy and ready to spend. In parallel, the finance minister can lay a plan for the implementation of the Goods & Services Tax (GST) and take the Parliament into confidence.
The retail sector is expected to grow at a rate of 12-13% this year; any additional taxation will definitely impact this growth. Even if the players resort to price increase, the upward movement of the sector will be affected.”
Kamal Nandi, Business Head & EVP, Godrej Appliances
“Consumer appliances are not really luxury goods today. We are an industry dedicated to improving the lives of people in India through the various household products. Appliances are tools which aid people in becoming more productive on a daily basis. We feel this industry needs to be supported through exemption from customs levy for key parts, to boost domestic manufacturing in line with the government’s ‘Make in India’ agenda. The issue of inverted duty structure also has to be addressed wherein raw materials attract more import duty than the final products.
Tax structure needs to be streamlined so that locally manufactured products are not at a disadvantage vis-à-vis imports. It is also essential to further support energy efficient products through tax concessions so that such appliances can be encouraged and power consumption reduced thereby ensuring a more eco-friendly future.
Also a forward movement on the crucial GST Bill will eliminate multiple levels of taxation while enhancing transparency which will ultimately benefit consumers.”
Vaibhav Singhal, MD & CEO, Savemax
“The retail sector in the country has made significant progress in the last few years on the back of a sharp rise in disposable income and buying power of the Indian Middle class. The entry of established wholesale retail chains has revolutionized the wholesale shopping experience and given retail customers the opportunity to buy a cross section of products at wholesale rates. However, a lot needs to be done to further develop the sector and give customers a truly world class experience. We expect the Union Budget 2016 to unveil measures that will push overall economic growth, increase income levels, and boost consumer sentiment.
We are also banking on the Budget for more spade work on the GST as that will put an end to multiplicity of taxes and streamline the overall tax regime of the country. Allied sectors like Transport, Warehousing, logistics etc must be looked into and given adequate support since they have a vital role in retail sector’s growth. We also expect the government to take positive steps in creating a level playing field for all retailers operating in India. These policies will have a positive impact on online players (operating on market place model or logistic providers), modern retailers (Wholesale and B2C, both models) and even the neighborhood stores.
Further, in line with the “Make in India” initiative, homegrown companies must be incentivized and supported through tax sops and policy interventions for a level playing field and healthy competition.”