The retail industry was almost squashed during the pandemic. It is slowly getting back on its knees with the opening up of the economy. To get this crawling industry back to its feet and start running, retailers believe that the budget should address two main things that will bring in ease of doing business for retailers: Freedom from various procedural strangleholds and Access to funds necessary for growth.
“Apart from various Direct and Indirect Taxes (GST) recommendations, RAI has submitted the following suggestions for the Government to consider:
- Accelerate the formulation and implementation of the National Retail Policy to boost the retail sector and facilitate ease of doing business.
- Allow retailers to register under MSME so that retailers too can be entitled for all benefits available to MSMEs.
- Encourage states to adopt Model Shops and Establishment Act.
- Consider decriminalization of Legal Metrology to improve ease of doing business.
- Modify/ extend Pradhan Mantri MUDRA Yojana Scheme to include financial support for digitalization to Kiranas & small retailers,” says Kumar Rajagopalan, CEO, Retailers Association of India.
Boost Local Consumption, Local Demand
The retail business is recovering at a quick pace and this momentum needs to be sustained. The next budget must prioritise growth-oriented policies and measures for the same.
“The industry has bounced back quite well from the COVID-19 pandemic and the lockdown from early part of 2020. We do hope that the demand sustains in the near term. It would be great to have measures taken from the government that will help increasing local consumption and local demand. On the supply side, government has taken a great step in the implementation of the production linked incentive and we would be happy to see more such measures which could boost domestic production of various products,” states Shreevar Kheruka, MD & CEO of Borosil Ltd.
Reduction in GST Rates
Retail industry is one of the highly impacted industries in this pandemic. The lockdown has brought in a slowdown like never before, and the Union Budget is the only hope for retailers.
“We expect the GST rates to be reduced to encourage people to spend more so retailers and e-commerce businesses can benefit. A boost in sales and market trust is a great contributor to regaining profits for a retail and e-commerce business. The government can make reforms so money lands in the hands of consumers, in return, stimulating demand and consumption. Liquidity for businesses and less credit accumulation also allows businesses to have more liquidity. It helps in faster recovery of losses and further growth,” Shalini Trehan, Co-founder, Recode states.
"Expecting a relief package from the government budget for Small and Medium Business. Due to COVID-19, most affected units are medium and small enterprises because large-scale businesses still survive but it is a survival battle for medium players and small-size enterprises. I hope the government will take the necessary steps for them in the budget and also hoping a relaxation in the GST policies as the previous GST compliances have increased the income tax and other tax regime many folds. In the last few years, the tax regime has got more complex as the compliances in the monthly returns have increased. I am of the view that the taxation system should be simpler so that it is easy for a common man to understand. The policymakers should make simpler things because simple compliance makes a more effective system which is required as per the new age and new time," adds Saurabh Khandelwal, Owner at Dhanvi Diamonds.
The economic slowdown can only be recovered if more jobs are created and retail businesses are given the necessary support.
“Revival Push is the key expectation from the Union Budget 2021. From an affordable housing perspective, corrective measures which ease out the liquidity challenges and improve home buying sentiments will be critical. COVID-19 has enforced changes such as - working from home, online education for the students, push towards touch-free consumer products - resulting in buyers looking for improved home buying options. This gives a much needed fillip to counter the gloom and doom home buying scenario especially in the Tier 1 and 2 markets. Relief for taxpayers/ reduced income tax rates will nurture the spur of demand in the housing sector this year. It will be beneficial to have a limited waiver on GST to aid the pricing burden on property owners. Additionally, the GST for sanitary ware and LED/ smart lighting is marked at 18 percent and 12 percent respectively - a reduction will be conducive to improved demand and help with the adoption of better consumer habits to gratify the Government’s Vocal for Local, Swasth India and affordable housing for all by 2022 goals,” shares Rajesh Mehra, Director & Promoter, Jaquar Group.
Relaxation for Medium and Small Scale Businesses
This year’s budget is critical as it would be the first budget in this new normal. The retailers expect the budget to bring a lot of relaxation for the small and medium businesses and also a fiscal package for the economy to revive better.
“We hope that the import duty on gold will go down to 4 percent and the budget to incentivize manufacturing of jewelry which will, in turn, improve exports as the trade body suggested the same to the finance ministry which will eventually improve exports and help bring in foreign exchange," says Rohan Sharma, Managing Director of RK Jewellers.