Organised retailers, particularly in the food and grocery segment, have had a good run this fiscal and more so post demonetization. In fact, players like Future Group and Reliance Retail have reported an increase in the number of digital transactions and market share, citing preparedness to capture e-wallet, debit and credit card payments.
What’s interesting this time around is that most retailers aren’t seeking direct benefits from the upcoming Budget but are certainly keen on increased tax benefits for businesses and people at large.
When asked about Budget expectations, Kishore Biyani, group CEO, Future Group, said there were none. “We don’t look at sops. A level-playing field and favourable tax rates under good and services tax (GST) will help the trade significantly. We are only looking at ways wherein consumption can be incentivised,” said Biyani.
Interestingly, the government’s focus on moving to a cashless economy has played out well for the wholesale and retail industry. And experts feel, the sector would greatly benefit from any move to incentivise digital transaction for merchants.
“Reducing or doing away with restrictive fees on credit / debit card and mobile wallet transactions could help boost small businesses and entrepreneurs who usually prefer to deal in cash and stay away from digital payments for this reason,” said Arvind Mediratta, CEO and MD, Metro Cash & Carry India.
To ensure growth for the retail sector in general, there are certain impediments and constraints that need government’s attention in the forthcoming Budget, says Deepak Premnarayen, president, Indian Merchants’ Chamber.
To start with, there’s need for a retail trade policy across states. “While some states have a policy in place, a lot many don’t. Likewise, there is need for a nodal department to act as a one-stop-shop to set up retail business and creation of retail entertainment zones with tax holidays and liberal tax regimes,” said Premnarayen, adding that food and grocery retail should be recognised as essential services and offered relaxation of stocking limit under Essential Services Maintenance Act (Esma).
The Budget, according to Ankur Bisen, senior vice president, Technopak Advisors, will largely be a play on consumer sentiments, which will drive consumption and positively impact retail and other consumer businesses. “Last year’s Budget was strong on the rural theme and this year, the industry is hoping for an overall positivity. Accordingly, budgetary decisions will have to be taken that will drive up consumption. Individual and corporate tax rates will hopefully come down,” said Bisen, adding that while need-based consumption will continue and grow along with the economy, efforts will have to be made to go beyond.
While food and grocery retail players seem contented with the overall market scenario, those depending on discretionary spends continue to be concerned. For instance, Govind Shrikhande, customer care associate and managing director, Shoppers Stop Ltd, feels the first and foremost expectation from the Budget is that it should singularly focus on concrete measures to revive the economy and boost consumer sentiment.
“Demonetization has left a trail-blaze of depleted consumer confidence in its wake. We hope that the FM’s briefcase has the antidote our nation needs for an upswing in sentiments. Secondly, we hope to hear about fixed and final GST rates and the exact mechanism and structure for the input-tax credit,” said Shrikhande.
Echoing the sentiments, Sanjay Vakharia, COO, Spykar Lifestyles Pvt Ltd, said, the market is expecting announcements that will put more disposable income in the hands of the people. “Lower personal tax rates will ensure the net can be spread wide to maximise revenues while not hurting the tax payers as much. The last few months, people across strata have struggled with the demonetization after-effects; to that effect, a soothing Budget is required to get the country up and running and buoyant again,