The Retailers Association of India (RAI) has put out the Pre-Budget Memorandum 2024-25, highlighting areas that require Government’s attention.
RAI shares that it has recommended that the Government should consider some key areas to make the retail industry stronger and contribute to the GDP of the country.
One of the things RAI highlights in its Pre-Budget Memorandum is boostingretail and consumption.“To ensure the growth of the sector, the Union Budget for FY 23–24 should focus on generating demand and spurring consumption by offering benefits or concessions in the form of lower taxes. It will boost the overall consumer sentiment and benefit the retailsector. Consumption equals to Development. Tax benefits and relief to individual tax payers will increase the monthly disposable income and support consumption,“says RAI in its statement.
“Further the budget must prioritize growth-oriented measures to stimulate demand and consumption. The budget should outline supportive policies, simplified regulations, skill development and simple goods and services tax (GST) norms to aid in the development of the retail industry,” it adds.
It also recommends low-cost finance to retailers, allocation of a special fund and formulation of a special trader finance schemes,innovative and convenient digital payment methodsand upgrades in technology for simpler digital payments.
Among other things the body has also recommended considering Retail as an essential service.“F&B retail sector needs to be considered as a priority and an essential service. Subsidies and benefits should be given on land rates and other necessities such as electricity,” says RAI.
The body has also urged for the expedition of National Retail Policy to enable ease of doing business.“There is a need to expedite the formulation and implementation of National policy. We believe that such a step would provide a substantial boost to the retail sector and facilitate ease of doing business,”
The body has also called for extension of all the MSME benefits to retail traders. “The Govt has included retail and wholesale trades as MSMEs and they are allowed to be registered on Udyam Registration Portal. However, benefits to retail and wholesale trade MSMEs are restricted to Priority Sector Lending only. We recommend that retail and wholesale traders should be eligible for all benefits available to other MSMEs,” says RAI.
The other highlights in RAI recommendations include:
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E-enablement of MSME retailers:“There is a definite need to help retailers in India modernize. The first step to modernization is the use of Point of Sale Machines (also called as POS machines) as these help retailers in making bills for customers and also allow the owners of the stores to allow a non-family member to man the cash tills without the worry of embezzlement,” says RAI
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Model Shops and Establishments Act
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EPCG for Retail Sector
RAI has also highlighted the risks of Proposed GST Hike on products based on price range. “The proposed GST rate hike on apparel, footwear, handbags, cosmetics, watches, and other premium products could have significant repercussions on the formal retail sector and consumer sentiment. Such increases may jeopardize the formalization of trade, encouraging a shift toward unorganized markets. Additionally, this move risks undermining the Government of India’s Make in India initiative, delaying the domestic growth of the retail sector and impacting employment opportunities. To achieve higher collections, the government should adopt a more balanced approach that safeguards the formal retail ecosystem and preserves consumer confidence,” says RAI.