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What retail industry is expecting from Budget 2020

What retail industry is expecting from Budget 2020
20
0

Indian retail sector has been struggling over the last couple of quarters due to consumption
slowdown. Let’s see what the retail industry is expecting from union budget 2020.
Manish Sharma, President and CEO, Panasonic India and South Asia, says, ‘Make in India’ story
is evident with the consumer durables industry. The companies have already invested around
Rs 7,000 crore* in past few years. The growing middle class and a youth-driven economy is
likely to further increase penetration of white goods in local households and have potential to
open up 150,000 additional jobs by 2024-25*.
 
“With this backdrop, we believe that the consumer durables and electronics industry has the
potential to help our economy move faster towards the USD 5 trillion target. And, our
expectation from the Union Budget 2020 is to see reforms that drive consumption and improve
consumer demand. The decision to exempt basic custom duty on open cells from 5% to 0% was
a welcome move last year and allowed us to pass on the benefits to the consumers by
reduction in TV prices. Such initiatives with phased manufacturing programmes are helpful.
However, the consumer appliances industry witnessed a flat growth over the last two
years, and we urge the government to continue in the trajectory of positive policies to lend
support and drive growth in the sector,” he states.
 
“To give you a perspective –  product categories like air conditioners, refrigerators, washing
machines, television (TV) and audio, have gradually moved from luxury items to necessity in
urban India- the overall market size is Rs 76,400 crore* and the market is estimated to grow at
a CAGR of 11.7 per cent till FY25 on the back of India's consumption story. Infact refrigerators
and TVs are turning into necessity products even in rural India. So reduction in GST for TV and
refrigerators will help reduce costs for you and drive further penetration of these products,” he
further adds.
Deva Jyotula, Retail Head, Kalpataru Ltd, states,“With the budget 2020 being around the
corner, the government is expected to come up with fresh policies and amendments to existing
schemes. Post the Budget 2019 the retail sector has defiantly witnessed an upward trend. The
Indian retail industry has emerged as one of the most dynamic industry due to the entry of
several new players. Some major expectations by the retailers from the budget 2020 would be;
Income support schemes to boost overall consumption, tax benefits to middle class to swing
consumers, reduction of corporate tax to 25 percent and GST slab to be simplified. There is a
gaping need for a special start-up growth fund to support start-ups.”
Kumar Rajagopalan, CEO, Retailers Association of India (RAI), says, "There is a need to create a
positive sentiment in the market. One of the measures required for that is to reduce the tax

burden so that there’s more money in the hands of the middle class. The other thing is to look
at easing GST related troubles for consumption-led items, be it reducing tax slab or simplifying
procedural issues. We believe that implementing a retail trade policy, which is predominantly
focused towards ease of doing business will be of immense help. There’s a need for ensuring
that finance is available for retail because if retail flourishes consumption automatically goes
up, giving support to all industries. To help grow and compete with global brands, the smaller
retailers would require a subsidised rate of financing and the larger retailers will have to be
given access to global funds. Unless this happens, local retailers will always be small in
comparison with global retailers who have cheaper access to funds as they don’t have a cost of
capital."
Deepak Chhabra, Managing Director, Tupperware India, “Retail Industry in India has gone
through various phases in the past decade or so. Yet, it has emerged as one of the most
dynamic and fast-paced industries. While the economic slowdown deterred consumer demand
and shrunk the consumption basket in past six months, we are hopeful of economic revival in
later half of the year. The upcoming union budget will have a key role to play in recovery of
manufacturing and other allied sectors and relaxation of tax norms for availability of money and
liquidity to strengthen purchasing power across consumer segments. We urge the authorities to
ensure that the budget is pro-consumption and measures are taken to fuel suppressed
demand.
 
“On the other hand, if we look at the ecommerce sector, it contributes just 5% to the country's
retail sector. Yet, it captures over 50% of the sector's share of voice domestically and
internationally with innovatively mushrooming start-ups and interest from global giants like
Amazon, Ali Baba and others in the sector. Indian authorities plans to introduce a
comprehensive policy on e-commerce in 2020 and it would be a marquee step in formalising
the sector further. Levelling the playing field with taxation norms around GST for online and
offline players, opening-up the sector for further FDI and supporting the smaller retailers (SMEs
and MSMEs) are aspects which the authorities must consider in the upcoming budget,” he
adds.

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