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The Indian retail industry is dynamic and is one of the biggest markets for global retailers. The industry has seen some major transformation over the last decade with a noticeable shift towards organised retailing. The retail sector is growing rapidly accounting for 14 per cent of GDP. The share of e-commerce is also growing steadily.
The Budget 2015 is just round the corner. The retail sector is expecting the Modi Government to announce major reforms that will give the industry a much-needed boost.
The foremost expectation from the government would be the implementation of an elaborative and simplified taxation. With complications arising due to taxation, the government must announce the roll-out of the GST and the DTC (direct tax code). This will not only bring in changes in the excise and custom duties, but also lower the rate of taxation and encourage higher compliance.
There is also a need to emphasis on the realignment of slab rates. Friendlier slab rates would increase the cost of living and inflation, bringing in greater purchasing power and allowing increased disposable income in the hands of the consumers. As the consumer buying power affects the retail market, measures would have to be taken to curb inflation.
Foreign direct investment (FDI) in retail has been another highly debated point that requires urgent focus. The government should also look at laying down some ground rules pertaining to boosting the e-commerce sector.
Growth in domestic manufacturing is flat and imports are on the rise. Marginal concession given earlier has failed to attract any new investments in setting up new factories. To provide stimulus to manufacturing, it would be best to completely remove the excise duty. This would eventually help India become a great manufacturing hub.
The government would need to lay out a clear road map for fuelling growth for the sector, which could set the mood for economic development of the nation. This Budget, we hope that the government arrives at a consensus to pave a positive pathway for a more stable economic growth in the country.
The writer is Managing Director, Woodland
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