The retail sector of India makes up for 10 percent of India’s GDP as per the latest IBEF report, and with many new entrants in the industry, especially in the retail tech space, the sector is becoming more fast-paced than ever.
This growth had, however, slowed down during the beginning of the pandemic, i.e., during the January-March quarter. This was followed by worldwide lockdowns that further worsened the year for many players. The space was, for a while, left without a contingency plan, but it quickly picked up the pace, the results of which could be seen during the festive season, especially in September 2021.
To meet the new challenges that were brought about due to COVID-19, players gave in to technology; even simple tactics such as sales via video-conferencing with customers ended up helping smaller, regional, players even more.
India’s retail sector is one that also largely owes its growth to an unorganized segment that thrives within it. 8 percent of our nation’s employment is due to the existence of this sector.
The upcoming 2022 budget should ensure that we have a set plan in place that must include a structure for any other health emergency that may come up in the near future since worldwide lockdowns did not turn out to be viable solutions in any regard. We saw immense job and livelihood losses and smaller players' closing shops.
READ MORE: FMCG Sector Expects Budget 2022 to Foster Consumption-driven Growth
The retail sector’s expectations from the Govt of India will be as follows:
Digitization - We have seen the growth of a plethora of technology start-ups that support the retail setup of the country. There is a push required to ensure that these technologies reach the regional retail setups as well. India’s tier-II towns are becoming a hub for startups serving the hyperlocal economy, which is a huge opportunity that can only be met by these emerging setups.
Manufacturing - The PLI scheme, launched by the government in 2021, must be extended to other sectors that make up the retail sector as well. The subsidies and benefits offered within the scheme will give a boost to manufacturing, thus helping with job creation. During the pandemic, we saw a number of startups come into the retail space that will now require such boosts to further their business. The scheme benefits should also entail a reduction in duty on raw materials that are necessary to be imported to India to build quality products.
An Omnichannel Approach Towards the Retail Sector - The government needs to hasten processes by treating the online and physical retail sectors alike. There needs to be a single window and similar clearances for both. The online retail startups came into play to give impetus to retail overall, and now it would be prudent to put in place policies to make the dualities go hand in hand.
Importance on Job Creation; Better Consumer Sentiments - Job creation is the single most important boost required in order for the retail sector to perform better. Much of the burden during the lockdowns were endured by the retail sector, wherein sellers' retail hours and operational hours were severely limited thus putting pressure on earnings. Job losses and redirection of people’s disposable income towards healthcare constricted the market until the last festive season during which we saw better sales due to pent-up demand. This stream of actions needs to continue and the government needs to ensure that consumer sentiment remains heightened.
Logistics - Logistics is the backbone of any industry, and with so much talk about logistics parks, etc., it is now time to act so that it is not the last remaining barrier to building a better retail sector. Budget 2022 must ensure the direction of new funds and execution of plans to improve our logistics space, which must be coupled with manpower and better technologies that exist in the world now.