Retail sector renews plea for industry status

BARELY recovering from the slump in the economy, organised retailers said the sector should

RELATED ARTICLES

be given in- dustry status, besides easing foreign investment norms in the forthcoming Union Budget.

"Industry status has be- en a long-standing de- mand of the retail sector.

Besides, we also want a re- laxation in the foreign di- rect investment norms," Retailers Association of India CEO Kumar Ra- jagopalan said. .

Sharing similar views, Koutons Retail India chair- man D P S Kohli said, "In- dustry status has been a re- curring demand of the re- tail sector for many years because only then will re- tailers be able to fully enjoy the benefits of organised fi- nancing, insurance and fis- cal incentives."

According to industry figures, only around five per cent of the estimated $ 450 billion Indian retail sector is organised. Calling for easing of FDI norms, Rajagopalan said, "No industry in India has grown without foreign di- rect investment participa- tion. For retail to emerge as a big player, more FDI should be allowed."

Besides, he said if FDI norms are not relaxed, the government must give a cl- arification on FII and for- eign PE funding as there is a lot of ambiguity.

Koutons' Kohli said clar- ity on the issue would help Indian retailers raise funds from abroad as the global liquidity condition is show- ing improvement.

At present, the govern- ment allows 51 per cent FDI in single brand retail- ing and prohibits any for- eign investments in the multi-brand segment.

Vishal Retail's CEO Ram Chandra Agarwal said, "Easing of FDI norms will bring much needed fund- ing which is very important for the sector at this time.

Besides, it will also bring along more competition."

He said the government should rationalise the tax structure and eliminate multiple layers of taxation as that would help make the sector more organised.

Franchise India chair- man Gaurav Marya said the government should make a special budgetary allocation to franchising businesses from the fi- nance allocated to the fi- nancial institutions.

"There are 35 million small and medium business units in India of which the retail sector constitutes 18 million units. Credit is a major hurdle in growth of franchising," he said.

Supporting the stand of the retail sector players, global consultancy firm Ernst & Young (E&Y) said that funding is the biggest issue coming in the way of successful growth of the re- tail industry.

"Allow more FDI and grant it industry status.

Both the steps will help re- tail to access capital and become competitive and will ultimately help con- sumers by giving them more choices," E&Y part- ner and industry leader (retail and consumer product practice Pinaki Ranjan Mishra said.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • By standing up for its priorities at WTO, India has saved its farmers

    Narendra Modi has demonstrated his global priorities during his short stint in power by engaging Pakistan and China on the need to mend fences with In

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Dealing with a sin called insensitivity

Rage and the notion of being above the law — ...

Purnendu Ghosh

Avoiding utopian or dystopian extremes

One must know the known in order to know the ...

Bubbles Sabharwal

Your happiness doesn’t depend on your needs

They are two different words (and even worlds) altogether: having ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture