Budget 2020 India: Budget 2020 is an opportunity for the government to address the issues faced by the retail sector and steer the economy towards a higher growth path.
The Indian retail industry has emerged as one of the most dynamic and fast-paced industry. The industry accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the employment.
As per a report by Assocham the Indian retail market is set to cross the USD 1 trillion mark by 2020, owing to the rise in per capita income. However, it would also depend on various factors like recovery of manufacturing and other sectors, incentives in the Union Budget and availability of money in the hands of consumers to make purchasing decisions.
2019 was somehow tough for the retail players as they struggled to keep themselves on the expected growth chart. Budget 2020 is an opportunity for the government to address the issues faced by the retail sector and steer the economy towards a higher growth path.
Few of the expectations that the retail industry has from the budget 2020 are –
1. Easing of GST norms and Reduction in GST rate will encourage more people to spend more – There is a need to simplify the GST regulations and provide structured employment of new mechanisms to ease the retail process in-country. There is a greater need to accelerate the demand and consumption in the economy. The sector requires incentives and measures, which will give more money in the hands of people and drive spending.
2. A comprehensive national retail policy that will lay down the framework for ease of doing business in the sector – The retail segment generates employment for a large number of traders – small and medium. The sector requires a comprehensive national retail policy to provide a framework for small businesses and assistance in the form of special incentives, which can be small finance solutions.
3. Further impetus to digital payments like UPI, credit card and debit card payments, etc. – With India moving towards becoming a digitally advanced economy, there is a need to modernize the retail segment by adopting digital ways and methods to make the customer experience more friendly and easy. In its movement, the Government has taken big decisions towards Digital India Campaign by making mandatory acceptance of payment through UPI by retailers.
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4. Infrastructure boost in Tier II and III markets – With growing urbanization, digital awareness in Tier II and III cities, and global brands eyeing these markets to expand; they hold great potential to grow exponentially. However, the lack of infrastructure is a deterrent in the same. We expect the government to have a solid policy/incentives or introduce relaxation in FDI policy in the segment.
5. Innovative incentives reforms to encourage new players in the retail industry – Digitisation and growth of the e-commerce segment, will play a substantial role in India’s dream to become a $5 trillion economy by 2024-25. The market holds huge potential to grow and would benefit with the introduction of competition i.e. entry of new players in the industry. The introduction of incentives, which attract new players will definitely help the sector move in the right direction.
With the Union Budget 2020-21, I hope that the government introduces a few policies which will have an overall impact on the sector.
By, Deepak Bansal, Director, Cantabil Retail India