With the third wave of the pandemic eclipsing the recovery trajectory last year, retail businesses were looking forward to learn what the Budget had for them.
Budget 2022 lays the emphasis on infrastructure development, digitisation, skilling and ease of doing business, which will ultimately benefit retail in the years to come.
The DESH STACK e-portal for skilling, reskilling and upskilling through online training will benefit various industries including retail, which needs quick onboarding of skilled talent as it is a labour-intensive sector with high employee churn. Skilling has been one of the key focus areas for retail since the coronavirus outbreak and this will help improve the overall quality of manpower available for retail.
The budget proposes forming a high-level committee to make recommendations on urban sector policies, capacity building, town planning, implementation and governance to steer a paradigm change. The intention is to turn hinterlands into centres of economic development, which will ultimately help the growth of retail as stores are gateways of consumption.
The various initiatives around urban planning, rural development, infrastructure development and logistics and transportation will ease the movement of people and resources and facilitate faster distribution for retail. This will help reduce overall wastage of goods and perishables, which is a big worry for retailers in the business.
The government's commitment towards 'minimum government and maximum governance' and increasing ease of doing business (EODB) should bring in a better policy and regulatory environment for retail. The government is keen on ushering in 'Ease of Doing Business 2.0', on that front work on the national retail policy is underway which will be a landmark reform for retail business in India.
Recent years have seen remarkable growth in digital banking, digital payments and fintech innovations. The government has been encouraging these sectors to ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner. Budget 2022 aims to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks. There will also be a focus on promoting the use of payment platforms that are economical and user friendly. This will further encourage MSME retailers to digitise themselves and accept digital payments, which will ultimately help consumers.
The extended Emergency Credit Line Guarantee Scheme (ECLGS) has been extended up to March 2023, which will provide MSME retailers with much-needed access to funds to help mitigate the adverse impact of the pandemic.
The budget has also earmarked an additional Rs 50000 crore for the hospitality and related enterprises under ECLGS. While this is a welcome move for the hospitality sector and should help restaurants, the same could have been extended to other forms of retail as they too are high-contact businesses that have been hit by the pandemic. Due to the constant lockdowns and restrictions, the entire retail sector needs support, which has not come forth.
Increased consumption is the need of the hour. And this is sorely missing from the budget. There were no income-tax related measures that put more money in the hands of common people. The consolation though is that no additional surprise taxes have been imposed.
Overall, it is a growth-oriented budget that has all the elements to usher in 'Amrit Kaal' for the nation in the next 10-20 years. As they say, what benefits the nation ultimately benefits its people.
Kumar Rajagopalan is the CEO, Retailers Association of India (RAI)