The total retail employment in the organized and unorganized sector of the country currently accounts for about 6 per cent of the Indian labor force and most of them are unorganized.
About 40 million Indians (3.3 percent of the Indian population) are employed in the country’s retail and logistics industry.
Coronavirus Pandemic The MSME units were effectively emerging after two waves of the pandemic, but due to the disruptions and restrictions caused by the current third wave, small businesses have once again started facing problems. It is an important question that the next Union Budget (Budget 2022, What do small retailers expect from the government with regard to? Of course, promoting digitization is very important right now, but there are many things that develop along with it. Let us tell you that about 40 million Indians (3.3 percent of the Indian population) are employed in the country’s retail and logistics industry, organized and unorganized.
Basically Indian retail shops are very small. There are over 14 million outlets operating in the country and only 4 per cent of them are of size larger than 500 square feet. The current situation with Omicron is getting worse like the first and second waves of Kovid-19. Even the current corona wave is creating a dire situation for MSMEs and small retailers.
lockdown ruined business
E-commerce has entered the business of retailers and small traders have lost a lot of money during many lockdowns. But despite all the trials in the business, the multiple waves of covid have forced the digitization of all businesses to accelerate. Small retailers contribute 25 per cent to the country’s $3 trillion GDP, but still have little choice but to digitize. Most retailers rely on physical movement to conduct their business.
Several solutions are now emerging to digitize the storefront of retail stores, including the concepts of virtual shops, where vendors can communicate over a live video call and customers can experience the same ecosystem as they would physically. Have gone to the store.
Online companies can help in reducing GST related hassles and registration requirements and this will help in digitizing MSMEs. The legislative framework should facilitate parity between offline and online retailers as well as encourage small businesses to engage in the digital economy and drive growth.
Digitization will get a boost if tax exemption is given
After analyzing this sector, this sector will get a big boost, if there is a tax exemption for investment in the budget, then small shops and SMEs can move towards digitization of their business. This can be a good measure for this sector as it will ensure its growth. It is clear that apart from cash crunch and credit access, a major problem for small retailers has been the lack of digitization. This remains a major challenge for the MSME sector and has forced many small businesses to shut down operations amid the pandemic.
But many new start-ups are offering services that can help small retailers take their stores online. In fact, many MSMEs that somehow faced economic pressure during the two prior waves of the pandemic are still unable to make digital presence of their shops. Consequently, tax exemption for investments made by small shops and SMEs in digitization of their businesses would be a good solution for this sector.
These are the expectations from the government
The MSME and retail sectors provide a large number of jobs, which are often disproportionate to the amount invested. The total retail employment in the organized and unorganized sector of the country currently accounts for about 6 per cent of the Indian labor force and most of them are unorganized. The sector is currently expecting two things, first, the overall tax burden should be reduced and second, compliance should be made easier.
Additional tax deduction for investment in retail infrastructure, high depreciation on capital goods used in the sector and allowed input GST for all distribution expenses including free samples, marketing collateral and so on are some of the possibilities. In simple words, the industry hopes that the government will take appropriate decisions that will not only lift them from this difficult time but also ensure the overall revival of the sector.
We expect that many of these policies will be included in the Budget 2022 and we are confident that these policies will help in achieving the goal of ease of doing business in the country.
(Article: Alok Chawla, Co-Founder, Kiko Live)