India Inc’s expectations ahead of the much awaited general budget to be presented by Finance Minister Pranab Mukherjee later today, are high.
IndiaRetailing contacted some key industries related to retail and real estate to gauge expectations from the upcoming budget. They believe that the decisive mandate given by the Indian voter bodes well for the economy and therefore, the government should focus on stability in policy making. They stated that in comparison to the rest of the world economy, India has fared reasonably well during the severe economic slowdown with stimuli packages and moderation of interest rates; the resultant stability should be followed up by higher liberalisation and further impetus to the growth of the economy.
Thomas Varghese, CEO, Aditya Birla Retail Ltd (ABRL) and chairman, CII National Committee on Retail stated that the retail sector is a major source of employment in this country and will serve as a vehicle to augment revenue from the large retail industry, which today is unorganised and has revenue leakage. “We expect the new government to accord industry status to retail; this will help ease the industry’s access to funding,” he said.
On a similar note, leading real estate consultancy Jones Lang LaSalle Meghraj (JLLM) believes that in addition to allowing FDI into the real estate sector, the Budget should focus on the introduction of a real estate regulator and provide forward momentum for Real Estate Mutual Funds (REMFs) to make real estate accessible to retail investors. “The budget should provide forward momentum for REMFs so that real estate becomes accessible to retail investors,” stated Anuj Puri, chairman & country head, JLLM. He further stated that the budget should free the rental income yielded by commercial premises from service tax and should provide clarity on the Software Technology Parks of India (STPI) guidelines.
Sharing his expectations from the upcoming budget, DPS Kohli, chairman, Koutons Retail India Ltd said that the government needs to put in place measures that will raise consumption in the country and thus would help the business. “The most significant development for retail sector would be the granting of industry status by the government. It is the first basic step needed for reforming the Indian retailing sector,” stated Kohli. He believes that if it happens, there will be greater focus on retailing development, fiscal incentives for retailing industry, availability of organised financing and establishment of insurance norms.
Varghese further pointed out that to simplify the path for organised retail, the government should adopt policies to streamline the process of opening stores by reducing the number of clearances and permissions required from multiple bodies. “A number of acts pertaining to retail will have to be re-looked at in the current context as these were drafted several years back and some of their regulations are no longer pertinent to the current context,” Varghese added.
Besides retailers, manufacturers, exporters and the logistic companies as well have a long list of expectations from the upcoming budget. They believe that as an emerging market and manufacturing hub for global players, India must look into improvement in infrastructure including ports, express road network and communication. Moon B Shin, MD, LG Electronics India, said, “India is in the path of becoming global player as manufacturing hub for all export to Europe, US and Africa. To prepare a common platform for manufacturing units, government must look for implementation of GST as promised in previous budget.” Similarly, supply chain major Safexpress stated that Indian Government must enhance its focus towards the growth of the supply chain and logistics sector in India by taking some concrete measures. Discussing about the key challenges faced by the Indian supply chain and logistics sector, Vineet Kanaujia, GM-Marketing, Safexpress said, “Inefficient infrastructure could be the single most critical issue India faces today. Despite impressive economic growth, India’s decaying roads, congested ports, inadequate power and complex state regulations are impeding development in the sector.”
He further stated that National Highways form only two per cent of the entire road network in India, but handle over 40 per cent of the national road freight traffic. Again, the complex regulatory structures bring down the on-road time of vehicles substantially. “In moving from one location to another, most of the time a vehicle takes is on the check posts. The Government must implement a ‘Centralised Toll Mechanism’ to bring uniformity in toll charges across different check points. This will help in curtailing the down-time and enhance efficiency by increasing the on-road time of vehicles,” stated Kanaujia.
The industry also expects that there should be some softening in the tax regime as well and the government should move in the direction of further streamlining the tax regime through faster implementation of the nationwide ‘Goods and Service tax, which will serve as a fillip to consumption.
— Sarimul Islam Choudhury