The Retailers Association of India (RAI) is disappointed with the Atmanirbhar Bharat economic stimulus package as it has failed to address emergent issues faced by the retail industry.
“The retail industry contributes around 40 percent to India’s consumption and 10 percent to India’s GDP. What retailers needed was wage support, a moratorium for payment of principal and interests and support in the form of working capital. This is critical for retail to survive,” said Kumar Rajagopalan, Chief Executive Officer, RAI.
Some of the earlier measures like reduction in TDS (Tax Deducted at Source) rates for payments or 2 percent reduction each in the EPF contribution of both the employer and employee are minor measures that fail to provide the monetary support needed to keep a business functioning.
Even the relief measures offered to MSMEs by the government do not help retailers as retail is not covered under the MSME sector, Kumar added.
He pointed out that retailers need working capital in their hands to retain employment, lack of support will result in the closure of businesses, and jeopardise livelihoods and jobs of 46 million direct employees out of which 20 million work in non-essential retail.
With no income and zero support from the government, the (retail) industry does not have the ability to support them. This will lead to a massive slowdown in consumption that will further harm the economy and the country,” Rajagopalan said.
In five tranches, Finance Minister Nirmala Sitharaman announced the Rs 20 lakh crore stimulus measures for various sectors and industries.
The focus was on agriculture, small farmers, migrant workers, street vendors, small traders mining, aviation, defence, space, MSMEs(micro, small and medium enterprises, NBFCs and MFIs (microfinance institutions), discoms, real estate sector, and tax measures.
The economic stimulus is intended to provide relief during the COVID-19 outbreak and the consequent nationwide lockdown.
The financial stimulus announced by PM Modi on May 12 is almost 10 percent of India’s gross domestic product (GDP) and comes as the country battles the economic effects of the coronavirus pandemic.