Google News
spot_img
spot_img

What the Retail Industry expects from Budget 2021

Must Read

The Retail & Shopping Centre Industries have been the most adversely impacted sectors globally during the pandemic. The industry had to undergo a swift turnaround, adopt technology and irrevocably change the way traditional retail functioned. The year saw many phases of lockdowns, including complete shutdown for a few months for retail. Segments like fashion and foodservice were some of the worst hit, reeling from losses.

Now as the industry limps back to normalcy, the industry is lining up some expectation from the Annual Budget 2021, in the hopes that positive policies and government support will help the sector and the millions employed by survive these turbulent times.

Here are some expectations from top retail heads:

RETAIL

Chandru Kalro, Managing Director, TTK Prestige

“I salute the efforts of the government in alleviating the multiple challenges faced by Indians during the pandemic. Initiatives like the stimulus packages and others played a critical role in infusing liquidity and kick starting demand in the market. For this budget, I remain optimistic that the government will continue on this upward trajectory, to provide a further boost to the recovering economy. I would like to see the government turn their attention from rural to the urban middle class. I believe tax breaks for the salaried class will be immensely beneficial, including steps to support the housing market. At this time, the middle class need all the help they can get as they have been badly impacted. I would also like to see the Finance Minister promote exports, in keeping with the ‘Make-in-India’ and anti-China sentiment. For our industry, I would welcome PLI schemes to provide an impetus to India’s manufacturing prospects and the kitchenware industry.  Any support when it comes to ease in GST compliance is also something that I am looking forward to seeing in the budget.”

Lokendra Ranawat, Co-Founder & CEO at WoodenStreet:

“In the budget 2021 ,the major focus will be on providing relief to the stress caused by the COVID-19 & on encouraging the growth of domestic organizations (to give further support to the Make in India initiative). Sectors such as automobile, IT, finance, & aviation will be in the major focus. 2020 was the year of start-ups, which even during such times showed an exemplary growth while bringing in investments of more than $11 Billion. So, in budget 2021, some more steps can be expected to further push the growth in the coming years. In addition to this, new corporate tax reforms can also be expected to provide further relief to the Covid hit sectors. Undoubtedly, the real estate sector plays a pivotal role in the growth of the India economy. In fact, realty domain is like more or less an engine to the entire economic machinery, and many allied sectors and industries like cement, steel, building/construction material, paint, consumer durables which directly or indirectly witness an impact due to developments in the realty sector. Hence, with a boost, the real estate sector is sure to have a positive impact on the associated sectors and industries as well. Moreover, if given the right push, employment generation will also see a substantial rise.”

Pankaj Khanna, Chief Sales Officer, Gourav Luminaries Pvt. Ltd.

“Expectations and Hopes are very high from this first post-covid budget!

On the demand side, we hope this budget strikes the chord with the common man.  I certainly wish this budget would do the same, what Mr. Manmohan Singh’s Budget did in 1991 to the Indian economy.

We also look upto this budget  to encourage manufacturing.  Two businesses – lighting and solar – are dependent on China. We get most of our requirements from China. We need to have grounds up manufacturing of solar cells. The Indian government should also make LED manufacturing key for India. We can start reducing dependence on China for LEDs.”

Vic Rana, Group Chairman of Red Ridge Global

“Making toys and stationery articles as essential items will be the much-needed start, that ways routing manufacturing and tax holiday benefits to Indian companies help them scale their operations and invest in precision machinery to roll out international compliance adhered quality toys. After all developed nations have done it, it is time we start too, if we want to be Vocal for Local in truest sense.”

Sandip Chhettri, COO, Tradeindia.com.

“Among the major issues that has been much talked about these days is Goods and Services Tax (GST). MSMEs demand simplification of GST. Additionally, there are GST rate related issues. There is a demand, for instance, that GST rates should be cut from 18 percent to 5 percent on professional services like CA, HR, marketing, supply chain management, etc. as these services are widely used by MSME units. Also, MSMEs favour removal of GST under the reverse charge or services procured from overseas. So, these issues need to address urgently.

Besides, credit crunch is still a big challenge for the sector. No doubt, the Centre has done a late in the recent months to help the COVID-hit sector, but still, that is not enough. So, the more it can be done to cut down the interest rates and enhance the flow of credit to the sector, the better it is. Also, steps should be taken to attract FDI and reform the system of foreign exchange inflows and outflows so that MSMEs can work efficiently with global partners.

As far as export is concerned, it is widely expected that the Centre will take measures to push the sector. The COVID-19 pandemic has hit the sector hard and though the prospects for exports in 2021 look brighter, the government should strain every muscle to catapult the growth of the sector. Here again, the cost of credit is a challenge the Budget should urgently address. In addition, a comprehensive strategy should be taken to help the sector in terms of infrastructure, marketing assistance, market and product diversification, technological up-gradation, etc.”

Manish Sharma, President and CEO, Panasonic India and South Asia.

Our expectation from the Union Budget 2020 is to see reforms that drive consumption and improve consumer demand.

During the upcoming budget session, I would urge the government should consider rationalization of tax rates on certain consumer durable electronics such as Air Conditioners (ACs) and Television (TVs). These are no longer ‘luxury’ items and have become common and essential household. The energy efficiency of air-conditioners has steadily increased and they now offer added features such as air-purification which is important in urban areas. Lowering the tax slab to 18% from 28% would help offset the price pressure and spur demand for both Air Conditioner (Split and Window) and Television (above 68 cm), thereby improving affordability among customers, attracting investments in component manufacturing, and help in penetrating deeper into the market, especially for the AC category.

For manufacturers, reforms like the reduction of corporate tax and introduction of the Production Linked Incentive (PLI) scheme were welcomed and it displays the government’s intent to promote healthy backward integration and provide impetus to domestic manufacturing while elevating India’s position as a global manufacturing champion. To ease supply chain challenges, I would urge the Govt to consider the ‘One Nation, One Permit, One Tax’ system for a seamless and efficient road transport experience.

The continuous tightening of the energy norms, upping the R&D and material cost, put upward pressure on prices for energy-efficient products, further dampening the consumer sentiments. Lowering the GST tax slabs for eco-friendly and energy-efficient products like Air Conditioners, Refrigerators, Washing Machines, etc. will drive demand and increase the adoption of sustainable appliances by consumers. The upcoming budget should additionally offer incentives for manufacturers to produce these energy-efficient products which will be in line with the government’s sustainability agenda.  

From a consumer perspective, increasing the deduction under Section 80C to 3 lakhs from current levels of Rs 1.5 lakhs will help reduce the tax burden giving more spending power to people.

SHOPPING CENTRE INDUSTRY

Abhishek Bansal, Executive Director, Pacific Development Corporation Limited

Under the sooner service tax regime, the developer’s establishment of premises used for leasing was not restricted to the use of input tax credit to undertakings other than undertakings contracting for works. However, under the new GST scheme, credit is denied to the same creator for all inputs and input companies. Since July 2017, the GST legal guidelines have been implemented, and the approved panorama relating to the comprehension of the GST legal guidelines has since evolved. The enactment of a unified GST was encouraged to take the form of unified oblique tax law to realise the ‘One Nation-One Tax’ principle.

Input tax credit limitations are against the fundamental objects of GST implementation and real estate sector seek full input tax credit profits as opposed to GST on forecast lease receivable for retail shopping centres, commercial workplaces along with IT/ITeS parks/SEZs and logistics, warehousing and industrial initiatives. This topic has been a litigation issue, and an amendment or clarification of the scope would decrease litigation and stimulate investment in this field.

Present limits on input tax credits deny builders the value of GST paid on the inputs and input companies used by them when building self-owned commercial areas. The value of the non-useable input tax credit would be added to the mission’s price, leading to higher leases. Due to the deceleration and change from workplace to work-from-home concept, the ongoing pandemic has significantly slowed down demand for commercial property in tier 1 and tier 2 cities. Nevertheless, as foreign companies need to diversify and shift their base to India, the pandemic has also created an opportunity for India.

The scarcity of input tax credit would adversely affect commercial real estate price along with workplaces and warehousing, resulting in giant features envisaged by the reforms mentioned above not percolating to the financial system. Given the aim of the federal government and the Reserve Bank of India to have native information saved in India through laws such as the Personal Data Protection Bill 2019, there is a growing need for information centre institutions in India, which may once again be negatively affected by the lack of input tax credit.

Input tax credits for commercial real estate assets intended for leasing purposes should be approved. If such input GST is allowed to be used to be compensated against the output GST liability, it will significantly assist commercial real estate developers in maintaining substantial cash flows; this will sustain India’s competitive edge through commercial real estate in the IT & ITES sector and startups. This will benefit the Indian office market, which, due to the COVID-19 pandemic, witnessed a decline in net leasing during the 2020 calendar year.

It can be a major impetus to allow input tax credits to developers, particularly those who build for lease. As of now, when building the project, developers have to pay GST on different products and services, but sadly, they are not permitted to set off the GST charged against the GST received on rentals.

In addition to attracting more developers to build Grade A leasing offices, if the government allows input tax credits, it will also help rationalise rents, ultimately helping India create a competitive advantage over other countries where real estate costs are higher.

Build to rent is entirely different from build to sell. Since this rental income is business income and not income generated from the selling of a capital asset, commercial real estate developers who are in the business of creating rent yielding properties should certainly be allowed to claim input credit set off against GST billed in rent. A paradoxical situation is formed by refusing Input Tax Credit when the production is in the course or advancement of business. The situation is not consistent with the purpose envisaged in the GST Rule of free flow of credits.

In this context, the GST scheme for the leasing process must be re-examined, which limits the declaration of an input tax credit on products and companies used for the production of immovable property, while the same is used for the offering of commercial leasing to taxable companies.

FASHION

Sachin Shah, CEO, Freakins

“We are hopeful of vast benefits in terms of the system of GST. It has become extremely difficult to handle sales GST and sales return with GST reversing. As the number of orders go up, the need for manual work increases which in turn has to be taken care of. Hereon, e-commerce Rules should be structured better with more details.”

Ashish Jain, CEO and Director, iatric Industries Pvt. Ltd.- Von Wellx Germany

Footwear and Leather is one of top 4 employment generating industries in the world and it is critically important for a young country like India to back such sectors which can generate massive employment opportunities.

Our industry is suffering from competition and incentives being offered by countries like Bangladesh, Veitnam etc. and requires support from the government to create a level playing field. Some of the measures that will help a lot are production linked incentives scheme similar to other sectors, higher duties on finished products imports, footwear being moved to the 5% GST bracket for all price ranges.

FOODSERVICE

Tarak Bhattacharya – CEO at Mad Over Donuts –

“This is indeed a good news for hospitality industry and a great start to the year! We welcome goverment’s decision as the extension till 1am  will help us improve the sales  especially in a city like Mumbai known for late night eating. With trains opening for general public, it will help our staff to come to work more conveniently everyday. We hope that this move will help us reviving back to normal situation. After a lot of hardship, this announcement gives a ray of hope to entire Food and Hospitality industry and we may expect better sales and revenue with this new guidelines “

Amit Jambotkar, Director: Thangabali, Esora, Light House Cafe And Idli Didli Doo –

“We are very happy with this extension of the operation hours for the restaurants, as this will improve our night business. We lost a lot of revenue during  season time like Christmas and New year so hopefully this will give impetus to the industry. Also with trains opening up for general public, it will help in staff mobility. We had rented few staff accommodation near our restaurants but now that can ease out. It’s a huge relief to get back to normalcy slowly.”

FOOD & GROCERY

Siddhant Wangdi, Founder of Meatigo.com

“2021 budget is going to be quite exciting to watch this year as the last year was full of challenges due to COVID-19. Despite the immense adoption of technology, we have a long way to progress in terms of efficiencies to drive growth to the bottom of the pyramid. We are early waiting to understand the government’s vision to boost opportunities for Indian businesses. From the food start-up sector perspective, we are into delivering fresh processed and ready-to-eat meat, therefore, we are expecting the government to simplify policies and help with streamlining the supply networks. The government has always been generous towards our sector however, considering the new innovative digital growth, we hope that our government extends additional support towards our industry in terms of investment, expansion, and transformation apart from the policies.”

Bala Sarda, Founder, Vahdam Teas

In post COVID world, we all are facing challenges of adapting to the new normal. As an entrepreneur, following are my expectations from the upcoming budget.

1. Reducing Long term Capital Gains Tax on Private Equity and making it at par with the public market. ‘You pay 10% tax on investments in stock markets but an entrepreneur pays ~27-28% tax on a business he has built from scratch.

2.  Stronger subsidies on import of Capital Goods used for core manufacturing and value addition for exports.

3. Lastly, the budget can look into widening the ambit of Special Startup manufacturing zones for companies or startups which want to foray into manufacturing. This would give the government’s “Vocal for Local” initiative a timely fillip.

Rajesh Ramakrishnan, Managing Director, Perfetti Van Melle India

“2020 has been an unprecedented year, which was interesting, challenging yet enriching in many ways. It had far reaching impact on businesses and individuals, and our business was no exception. There are some early signs of recovery and this needs to be sustained in 2021. One of the key tasks of the Budget 2021 would be to fuel consumer demand and further revive the economy. The Government’s focus needs to be on increasing the rural spending and this will further boost rural consumption of FMCG products. Adequate investment in infrastructure, agriculture and social sectors will also further drive the pace of recovery.”

BEAUTY & WELLNESS

Vandana Luthra, Founder and Co-chairperson, VLCC Group.

“The COVID-19 pandemic has underscored the importance of healthy living and maintaining our physical and mental health. To encourage individuals and families to proactively invest in preventive healthcare, wellness programmes for people suffering from lifestyle related ailments should be brought under health insurance coverage. This will also help reduce the burden on the curative healthcare infrastructure in the country, which would be better served to addressing communicable and life threatening disease and ailments. Higher resource allocation for improving the Skill Development ecosystem in country would also be a welcome move. The fact is skilling / reskilling / upskilling of youth is a critical need given that over a third of the country’s population will be in the 10 to 34 age group in 2021 and as per some estimates over 300 million youth need to be given skills training for ensuring gainful employment for them.”

TECHNOLOGY

Varun Babbar, Managing Director, Qlik

“FY 2020 was a difficult year for everyone, and this budget will be a vital one as the country needs to balance investing for the future while dealing with the immediate aftereffects of an economic slowdown. While some industries were hit harder than others, there have been some bright spots in the overall tech front – we have seen both the private and public sector accelerate digital transformation and invest much more into analytics and AI to solve real problems, quickly. The Government’s twin vision of becoming a 5 trillion-dollar economy and building an ‘Atmanirbhar Bharat’ will depend on how we invest today. There is a clear need for upskilling in areas like critical thinking and data literacy together with further creating infrastructure not just in terms of technology, but also the legal framework around data, data privacy and AI. We look forward to a budget that clearly balances solving today’s issues while still thinking long-term so we can build a strong and resilient economy that will propel India to newer heights this decade.”

Anupam Jalote, CEO, iCreate

“The need of the hour is to reignite our manufacturing and industrial prowess. Although Digitalisation (India’s area of strength) will catalyze the growth trajectory, bricks and mortar industry will provide a very strong thrust to the growth engine. In this budget, a signal of inclusivity to global companies and innovators will be very helpful in driving this change – a signal that foreign innovators / innovative companies are welcome to come to India and earn handsomely provided they come with the very latest in innovative technologies and establish knowledge bases in India. This budget can help by modulating the treatment to monies spent in developing and proving innovations and taking them to commercialisation. This will go a long way in supporting the risk taken during the innovation to commercialisation phase. Once industry sees the Budget supporting innovation, like it has supported start-ups, the transformative wave that we need will start to take shape. Being flexible on FDI as well as taxation of gains from commercialisation of new innovation will be a big help.”

LOGISTICS INDUSTRY

Deepal Shah, CFO, Allcargo Logistics Ltd.

“Finance Minister Nirmala Sitharaman will need to ensure that the Indian logistics industry scales a high growth trajectory. The budget should focus on facilitating digital transformation and process automation across the supply chain spectrum by encouraging logistics companies to invest in technological advancements. With online transactions becoming an integral part of the Indian consumer’s everyday existence and the e-commerce boom reshaping the logistics industry in a hyper-connected world, the government will have to make budgetary allocations for building robust road infrastructure. This will help in shrinking last-mile timelines and ensuring seamless connectivity. Freight movement in India through waterways continues to be highly underutilized contributing to a skewed multimodal transport mix.  The government will need to come out with a sound policy framework with a view to building a robust and well-integrated Inland Water Transport (IWT) system across the country. Priority focus will also need to be given to offering tax sops and relaxing indirect taxes for warehouse leasing to help warehouse players and 3PL service providers gain operational scale and business expansion.”

Latest News

The Luxottica report card for 2022

A look at how the world’s largest eyewear company fared in terms of revenue growth in key regions across...

Login to your account below

Fill the forms bellow to register

Retrieve your password

Please enter your username or email address to reset your password.