As insufficient aggregate demand rules during the COVID pandemic, the retail industry has taken the largest hit. Slow demand recovery will exacerbate the pain already induced to several segments of retail owing to the lockdown, coupled by the uncertainty across the consumption spectrum.
The importance of retail to India’s economy cannot be understated. Contributing 12% to the gross value added to overall GDP, retail is India’s third-largest sector. It also touches the lives of crores, by providing direct employment to more than five crore people, and several more in allied sectors.
The pandemic has created vast disruptions in demand and supply chains across the country, however, as India unlocks economy, it provides us with the opportunity to reassess the areas that will help revive the industry. While the government’s financial stimulus is crucial to improve consumer spending in the wake of the pandemic, supply-side policy interventions are essential to catalyse the retail grow faster and be more efficient in the long run.
In order to strengthen the retail segment in India, CII-Kearney report titled “National Retail Policy- To Enable the Next Wave of Retail Growth was released by Mr. Anil Agarwal, Joint Secretary Department for Promotion of Industry and Internal Trade Ministry of Commerce & Industry at the CII India Retail Summit 2020.
The CII-Kearney report details the critical areas that the cohesive model retail policy needs to pay attention to, across five building blocks:
streamlining approvals and compliance mechanisms to improve ease of doing business,
improving access to capital, especially for traditional retailers and smaller players
rapid adoption of technology and modernization by traditional retailers
bridging logistics and supply chain infrastructure gaps, and
enhancing labour participation and productivity.
The government can act as a catalyst by rolling out a cohesive model retail policy to reinvigorate the sector and unlock next phase of growth. The report highlights the key Government interventions and potential incentives that can help create an inclusive environment for traditional retailers, boost attractiveness for investment and create a win-win situation for various players in the industry, consumers and the Government.
“The CII-Kearney report outlines supply-side policy interventions to drive retail growth. A National Retail Policy is needed to streamline approvals and compliance mechanisms, improve access to capital, enable technology led modernization, bridge infrastructure gaps in retail and increase labor participation and productivity. These will bring back five to seven lakh retailers who have shut shop, back into business, generate 30 lakh more employment and drive 2% incremental GDP growth.” – Subhendu Roy, Partner, Kearney
“A National Retail Policy needs to be rolled out with immediate effect that brings all forms of retail under one umbrella. There are four crucial areas that the policy needs to pay attention to; Ease of doing business, Modernization and adoption of technology, Access to Capital, Employee Upskilling. These four areas would be able to better aid the retail sector through trying times while creating an inclusive an holistic environment for the segment to thrive.” - Shashwat Goenka, Chairman, CII National Committee on Retail & Sector, Head – Retail & FMCG, RP- Sanjiv Goenka Group.
24 November 2020