With numerous expectations and curiosity around what is in it for various stakeholders, India’s 2017-18 budget is one of the most sought after events. Just like every other sector, retail stalwarts have also pinned their hopes on Finance Minister Arun Jaitley when he will present the Budget on February 01, 2017, expecting some good announcements in favour of retail sector.
Krish Iyer, President & CEO, Walmart India
This Government has been announcing various policy measures which are important for the economy throughout the year. I don’t think it’s any longer that big bang approach on the Budget day and which is good in a way because it brings in transparency, reduces fluctuation in the prices in the share market. As far as the Retail industry is concerned, from the last Budget and throughout the year, 24/7 Model Shops and Establishment Act, 100 per cent FDI in food retail and a lot of measures have been announced. I do not have any specific expectations for retail industry.
Govind Shrikhande, Customer Care Associate & Managing Director, Shoppers Stop Ltd: First and foremost, we hope that the Union Budget is singularly focused on concrete measures to revive the economy and boost consumer sentiment. Demonetization particularly has left a trail-blaze of depleted consumer confidence in its wake. So we hope that the FM’s briefcase has the antidote our nation needs for an upswing in sentiments.
Secondly, we hope that the Government provides much-needed clarification on the GST front. We look forward to hearing about a precise timeline, fixed and final GST rates and the exact mechanism and structure for the input-tax credit.
Yogeshwar Sharma, Executive Director, Select CITYWALK
Indian economy is passing through a tough phase. The various initiatives taken by the government to streamline the processes will yield long term results however, it has adversely affected in the short term. The changes envisaged has put in a sense of fear and uncertainty in the minds of indian businessmen and consumer. Therefore, this budget is a big opportunity and platform with the government to announce few decisions which will bring in a sense of certainty and morale booster.
The GST is a very good initiative and with years of hard work states and central government have come to some consensus. It will change the way businesses are carried out in the country. Having said that, first couple of years will be very difficult to follow the processes laid out & reconciliations to be done.
Tax incentives are one of the major need of the hour as it will ease the pressure on margins.
Make in india story needs more incentives to be competitive with other manufacturing hubs such as china.
Ease of doing business is yet to translate in reality.
International investors need clarity on regulatory laws to invest long term in India.
Most of the international brands in retail are finding india as a future long term market. Brands like H&M, ZARA, GAP etc. have already entered Indian market in past few years. Similar big brands, though convinced of the size and potential of market, are on wait and watch approach and waiting for more stability and clarity on ease of business.
After agriculture, retail is the second biggest industry. Organised retail is next big thing and is to stay for long.
E-commerce sector in India continues to grow at scorching pace thereby contributing to Government’s ambitious plans around ‘Make in India’ and employment generation. We anticipate that the Government will leverage Budget 2017 to provide further impetus to this sector through tax reforms and enhanced level playing field. GST is the cornerstone to releasing the dream of one-country one-market, as it can potentially resolve impediments in inter-state movement, unburden e-commerce of multitude of taxes e.g. Entry Tax etc.
All Indians aspire to own their home and we hope that the Budget 2017 accelerates development of urban infrastructure and provides incentive to home buyers. It will also support our mission of helping 20 million customers create beautiful homes by 2020.
Kavindra Mishra, CEO Pepe Jeans India
1)We are hoping the budget considers providing incentives in the retail landscape development which will help facilitate construction of malls at lower costs; thereby allowing ease in expansion.
2) With the Make in India initiative, we hope the budget helps support the setting up of manufacturing units for apparel industry. This being done locally will help boost the retail sector.
Harkirat Singh, MD, Woodland Worldwide
“We are quite optimistic and have high expectations from the upcoming union budget. All eyes are now on the FM for clarity on the rolling out of GST and fixing indirect tax inefficiencies. We feel that textile items should be kept under GST with the minimum possible tax slab of 4-5 per cent as it is a key item for the common man. Secondly, there are lots of raw materials like nylon and technical fibers, which we wish to import from other countries and manufacture finished products here. However, high duty acts as a deterrent and we get bound to import finished products. So, the government must lower the import duty to aid companies like Woodland. This will certainly boost PM’s ‘Make in India’ initiative. We believe that government would also lay emphasis on curbing inflation as increased inflation affects consumer’s buying power which further affects the retail market. We hope to see supportive policies for the retail sector in this year’s budget.”
Swati Bhargava, Co-founder, Cashkaro.com
I personally expect the upcoming Union Budget to be very positive and favourable towards the poor, middle class and business community, particularly because these segments were most inconvenienced by Demonetization. In a bid to alleviate this pain, we can expect incentives on direct tax. This could mean lower personal income tax rates and lower corporate tax rates too. With Cashless economy taking center stage, the Government has already taken a number of steps to encourage electronic payments. We could see Finance Minister, Arun Jaitley announcing a list of measures as incentives for digital payments which will benefit the e-commerce industry as a whole. We might also get clarity on the long standing topic of introducing GST. Prime Minister Narendra Modi’s flagship project, Startup India might get a push in the upcoming Budget. We could see a new set of tax concessions on employee stock options, unlisted securities and convertible instruments. Lastly, as a woman and an entrepreneur, I would be most excited to see increased allocation towards building infrastructure in India and increased planned public expenditure. This would go a long way in creating a safer & more conducive environment for women and furthermore in creating world class companies. Overall, as a taxpayer and a founder I am eagerly waiting for February 1.
Sharad Venkta, CEO & MD, Toonz Retail India Pvt. Ltd.
This year, unarguably budget is the most anticipated event given the revolutionary move of demonetization by the government. The Budget 2017 will come in the shadow of demonetization and upcoming GST. Post demonetization government is under pressure to improve public sentiments and maintain/increase economic growth. Raising the bar for tax exemption and reducing direct tax will give some relief to the end consumer, with more disposable income in their hand.
It is also expected that government will present more concrete timelines for GST. Implementation of GST ((Goods and Services Tax) is going to be one of the biggest reform for ease of doing business by the government and it is expected to be game changer for Indian economy. Retail industry is set to benefit the most because of implementation of GST as it will help efficient allocation of resources, uninterrupted supply chain, a check on inflation, increased tax collection and improvement in compliance. As per estimates this should lead up to additional 200 basis points in the economic growth.
Also with government’s current focus on moving towards cashless economy, we expect reforms to incentivize cashless transactions and a robust SOP for digitization.
Nitin Khandelwal, Chairman, All India Gems & Jewellery Trade Federation
“GJF has already met the Ministry of Finance for making a representation of their pre-budget recommendations for the benefit of the Gems and Jewellery industry. Following are few key recommendations from GJF:
· GST at 1.25 per cent for the Gems & Jewellery sector, as this will help the industry become compliant and organized.
· Increase the mandatory PAN card limit to 5 lakhs and above
· Reduction in import duty on gold from 10 per cent to atleast 5 per cent
· The urgent need for the formation of domestic council for Gems & Jewellery sector is strongly recommended to address various domestic issues pertaining to the industry including generation of reliable database and regulation of fair trade practices in the industry and help the Government in the formation of industry friendly policies for trading and manufacturing.
· Recommend the Dore import to be kept under tight observation to avoid malpractices and no monopoly to be permitted
· Import of gold has presently been confined to Banks and nominated agencies. This can be continued, but over time more and more agencies should be given opportunity to be enlisted to allow good competition and easy availability of gold across the country.”
Piyush Sharma, CEO (GORB)
Owing to the recent demonetization policy, this is probably the most awaited Union Budget. Lately, the food-tech sector has seen many ups and downs, however, the sector has immense potential to grow. 2017 can see a new wave in the sector if policy regulations like ease of compliance are implemented. While the Start-up India programme launched by Prime Minister Narendra Modi is a welcome move that will make investors take notice of start-ups, the need of the hour is to increase budget allocation for investment in better infrastructure and Internet penetration. The budget should include special allotments for experimentation with innovations and technology.
The Government needs to make technology more affordable and introduce initiatives to increase adoption of technology to encourage digitization. Though, the government has taken some key steps to promote cashless or digital transactions to take India towards a cashless economy, lowering the Transaction Discount Rate (TDR) on card payments will benefit consumers and boost digital transactions. Additionally, the Government’s move to waive service tax on debit and credit card transactions of up to INR 2,000 and other such initiatives will benefit the sector.
Furthermore, support schemes, easy access to funding better options on loans and other banking policies for small home entrepreneurs and digital adoption initiatives by the government will lend a further impetus to the sector. Moreover, tax exemptions for start-ups will allow entrepreneurs to devote their time, energy and resources to build upon their innovative ideas. We are looking forward to the move to extend the tax holiday from 3 years to 5 years. Likewise, we look forward to clarity and closure on GST implementation. This budget can be an engine to propel the growth in the startup ecosystem.
Kapil Hetamsaria, CEO & Co-Founder, Velvetcase.com
Ajay Laddha, Co Founder, YMS Mobitech Pvt Ltd
The India consumption story, especially the sectors dealing in cash, faced a small roadblock when the government announced its demonetization move in November. We think the Finance Minister will try and reverse the negative sentiment with his Budget speech. While demand has been sharply hit, we are expecting a sharp recovery in the next couple of months. The Budget may look to aid consumption by tinkering with personal income tax. We are also expecting incentives for e-payments and digital transactions, improving the share of retail business, hitting the grey market and leading to higher acceptance for e-based offline distribution.
Pankaj Anand & Anil Arora, Co-Founders, Sabhyata
2016 has been a remarkable year for India, which witnessed two major economic developments – demonetization and GST Bill. Along with the entire nation, textiles and apparel industry is eagerly awaiting and expecting significant developments that would generate a unified market for retailers.
GST bill, one of the biggest reforms in India’s indirect tax structure, is soon expected to see the light of the day, in the upcoming Union Budget. Although GST rates are yet to be revealed, textile and apparel industry has high hopes pinned from its execution. It is predicted that prices for branded apparels might increase by about 12 per cent, but on the other hand, disparity in terms of excise duty will shed off, effectively. Hence, a unified taxation system for retailers will finally fall into place, contouring to GST regime. Aligned with this, industry experts are sincerely hoping that, textile industry would be positioned in the lowest tax structure slab.
Achal Bakeri, CMD, Symphony Ltd
With all eyes on GST launch, 2017 will turn out to be a historic year for indirect taxes. Recently Finance Minister Arun Jaitley said that July 1, 2017 would be a “more realistic date” to roll out GST. No doubt, this will change the whole taxation system and will make the task of estimating and filing taxes much easier. Though there are certain issues between centre and state government over processes and implementation, I hope government will redress such issues in the upcoming unionbudget.
The government needs to bring in simplification of tax laws. Moreover, the need of the hour is to widen the scope of taxation. We see big corporate houses as prime targets for paying taxes but at the same time we forget that a large number of taxpayers are either evading tax net or not paying appropriate taxes. Contributing to economy is everyone’s responsibility and I think each and every citizen need to be responsible towards paying their taxes.
This year many corporate houses and public in general are very eager to see change in income tax slabs. Many reports suggest that to ease the pain of demonetization, government may revise minimum taxable income to Rs. 4 lakh from current Rs. 2.5 lakh per annum. If union budget come up with any such announcement, it will be cheered by the salaried and self employed class.
In addition to this, we expect the Government to lower the corporate income tax to 28 per cent in the upcoming budget and reduce it further to 25 per cent in coming years as promised by Finance Minister.
Ease of doing business should be the top priority for the Government.
“Amidst a lot of assumptions, the LED lighting industry is one that demands a lot of attention. It needs to be promoted in a strong manner as it has enough potential to go a long way. This year the growth prospects look better than the last year for all sectors and as a developer we expect a lot in term of attention and revenue for the sector. From the industry point of view, there is a need to provide Income Tax benefits to LED manufacturing companies along with accelerated depreciation benefit to LED plants and push towards faster implementation of GST.
Demonetization has given a fresh start to the economy by encouraging a proper flow of the money cycle, but somehow has reduced the work pace. According to us, the budget should be able to create an environment which can address the issue of skill gap, improve ease of doing business and accelerate digital deployment even for smaller towns and villages for better reach. Bigger metros and town are on every company’s point as they give better returns but small towns are a better way to expand. Government spending for smart cities should be optimized to ensure faster adoption of smarter techniques for early development of new products required for the Smart Cities. Further, an LED substitution fund should be created for state governments and public sector to shift all conventional lights to LED lights.”