Hyderabad: Due to the Covid-19 pandemic, several sectors sank like the chariot wheel of Karna, in the battle of Mahabharata. Retail business sector was one of them. Numerous studies indicated that sky alone could be the limit for the development of the retail business sector. However, the pandemic came like a bolt from the blue to shatter the sector.
The Confederation of All India Traders, a conglomerate of 40,000 traders associations, had announced in July last year that in the first 100 days of the lockdown, the losses they suffered amounted to around Rs 15.5 lakh crore. Though shops were reopened with the unlocking of business in a phased manner, uncertainty still looms large as business is yet to regain the lost momentum.
The Retailers Association of India (RAI) is demanding that the Center should extend budgetary support if the retail sector is to overcome its problems. The association is demanding SOPs for the retail sector in the coming budget. Consumption is the driving force of the country’s economy and the retail sector is a gateway for tapping into it. The essence of RAI’s contention is that the retail sector can gain strength only when the policy related obstacles to its growth are removed and the funds needed for its development are made available. RAI is also for a national retail business policy to be formulated forthwith and brought into effect immediately. It is seeking grant of MSME status to the retail business and provision of financial support for the digitization of Kirana Stores under the Mudra Yojana. It is time for the Center to take strong measures in this regard as studies indicated that around 30 lakh jobs can be created by 2024, if a comprehensive national retail policy is brought into effect.
According to reports, the size of the national retail business sector will grow from Rs 79,500 crore in 2017 to Rs 1.75 lakh crore in 2026. India stands at the second position in the World Retail Business Index for the year 2019. Retail business occupies 10 percent of the Gross Domestic Product. Nearly 8 percent of the jobs generated in the country are due to this sector. However, 88 percent of the retail business is in the hands of the unorganized sector. Because of this reason, the retail sector is unable to contribute as much to the GDP, unlike in Malaysia and Thailand.
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Nearly 7 lakh retail shops were closed down due to the liquidity crunch during the lockdown period. This reveals that the problem is deeper than the mere snapping of demand and supply chain. The Center, on the other hand, is saying that it is giving finishing touches to the national retail business policy with the aim of encouraging ease of business, liberalization of norms, imparting skills to the workforce associated with this business and make the best use of opportunities arising out of the internet.
The traders’ bodies are lamenting that one has to take 16 to 25 licenses to establish a retail shop. The kinds of licenses to be obtained vary from State to State. The traders’ bodies are seeking a single-window clearance and that too via the internet. They are also seeking initiative to provide working capital and clearances for adopting modern technology.
Lack of warehouses, cold storage facilities and transport services are resulting in around 8 percent cost escalation. Retail business can shine only when the national policy seeks to solve such fundamental issues.
