Indian retail is on course to generate business worth $430 billion by 2010, says a report by the Federation of India Chambers of Commerce and Industry (FICCI). Infused with the coming in of conglomerates like Bharti Enterprises, Reliance and some foreign players, the share of organised retail is tipped to go up from the current 4 per cent to 20-22 per cent to become a $90 billion industry, while the unorganised sector will likely touch $340 billion in the next three years. According to the report, investment of over $30 billion is likely to be made in the next five to seven years. Nearly 92 per cent of the investment is slated for urban areas, with the maximum share expected to be channelled into the hypermarket (38%) and supermarket (28%) formats.The growth is expected to generate 18 million jobs, making it the second largest employment-generating sector after agriculture.
The report includes some corrective measures: among them, introduction of retail as a curriculum subject in schools and universities; simpler tax laws with a tax holiday for the cold chain infrastructure; and greater rationalisation of the tax structure and reducing the excise duty from 16 to 14 per cent, which would help in making India a common market. FICCI Secretary General Amit Mitra said, “Industry status to retail is the first basic step needed for reforming the retail sector. This would help the sector avail of organised financing and fiscal incentives.”
