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Mumbai, 17th of December, 2024 : It is universally acknowledged that India is amongst the fastest growing economies in the world, and much of this growth is attributed to the burgeoning middle class, which is fueling economic growth through retail consumption.

Retailing in India is one of the pillars of its economy and accounts for about 10 percent of its GDP. The India nretail market is estimated to be worth $1 trillion and is expected to reach $2 trillion by 2032. India is one of the fastest growing retail markets in the world, with 1.4 billion people

Another facet of the contribution of the retail industry in the growth of the Indian economy is the generation of employ mentin the retail industry and industriessupportingtheretailbusiness.Around 50 million people are employed in this sector. The retail sector is the fastest growing sector in terms of employment generation and is second only to agriculture in terms of the number of people it directly employs, besides creating indirect employment opportunities.

Akey aspec to fthi ssectoris thattheadvantagesare no tjustre stricted to specificstrata of the society; instead, retail has the ability to benefit different entities ‐ institutional as well as social. The contributions from modern retail flow to the exchequer due to increased transparency.

With the recent reforms, the Government has mades ubstantia lefforts to revitalize the sector, We, at the Retailers Association of India, are genuinely supportive of the Government’s vision to achieve inclusive growth for India. The retail sector has the true potential to provide impetus to the Government’s vision.

Through RAI Pre-Budget Memorandum 2025-26, certain areas are highlighted that require Governments attention, as they have the potential of providing a necessary push to unleash growth in the sector. RAI recommends that the Government should consider the following key points to make the retail industry stronger and contribute to the GDP of the country.Boost Retail and Consumption

To ensure the growth of the sector,theUnionBudgetforFY25–26 should focus on generating demand and spurring consumption by offering benefits or concessions in the form of lower taxes. It will boost the overall consumer sentiment and benefit the retail sector.Consumption equals to Development. Tax benefits and relief to individual tax payers will increase the monthly disposable income and support consumption.

Further the budget must prioritize growth-oriented measures to stimulate demand and consumption. The budget should outline supportive policies, simplified regulations, skill development and simple goods and services tax(GST) norms to aid in the development of the retail industry.

I.Provide low-costfinance tore tailers

There is a need to provide lower interest rate to the retailers through the special announcement in the budget to assure easier financing for the Retail businesses. The governmentshouldallocateaspecialfundandformulateaspecialtraderfinanceschemewith SIDBI to help millions of independent retailers across the nation by declaring low-cost loans and relaxing some industry guidelines.

IIIEncourage Innovativeand Convenient Digital Payment Methods

Consumers may now make payments more easily thanks to the Unified Payments Interface(UPI) and other digital payment options.In India’ssemi-urbanand ruralshops,UPIa lonesaw a650%increase.The samehassupportedeliminatingtheburdeninthecash-basedeconomy like India and making it simpler for corporations to enhance their operations in the online segment. It is required to assist these upgrades in the technology which makes it simpler to do digital payments. New and easy modes of digital payments must be supported by the government by announcing the focused extent. Further, there is a need to promote Digital transactions by giving waiver of MDR/subsidized MDR on use of the debit card.

IV.Consider Retaila sanessential service

F&B retail sector needsto be considered as apriority and an essential service. Subsidies and benefits should be given on land rates and other necessities such as electricity.

V. Expedite National Retail Policy to enable as eofdoing business

There is a need to expedite the formulation and implementation of National policy. We believe that such a step would provide a substantial boost to the retail sector and facilitate ease of doing business.

Extend all the MSME bene fitstore tail traders

The Govt has included retail and wholesale trades as MSMEs and they are allowed to be registered on Udyam Registration Portal. However, benefits to retail and wholesale trade MSMEs are restricted to Priority Sector Lending only. We recommend that retail and wholesale traders should be eligible for all benefits available to other MSMEs.

VII. E-enablement of MSME retailers

ThereisadefiniteneedtohelpretailersinIndiamodernize.Thefirststeptomodernization istheuseofPointofSaleMachines(alsocalledasPOSmachines) as the sehelpretailers in making bills for customers and also allow the owners of the stores to allow a non-family member to man the cash tills without the worry of embezzlement.

The uses of the above machines are many. The key uses are:

Itallowsownersofbusinessestoemploymanagerswhocanmanagethebusiness without losing control over basic data of sales.
1. Itallowsaquickupdateofstock,sales,andintakeandhencehelpsmanagesales and inventory
1. It he lpskeep arecord ofcustomersandallowsforamoreusefulCRM(Customer Relationship Management)
1. The bills mad efroms uchmachines create accountability to cus to mers and ensures that retailers take responsibility for what they sell to customers.
VIII. Model Shops and Establishments Act

The Central Government introduced ‘The Model Shops and Establishment (Regulation of Employment and Condition of Services) Act 2016 (hereinafter referred as The Model Bill) on 29^thJune 2016 which has been one of the key asks of the Retailers Association of India for theoverallbenefitandgrowthoftheIndianretailsector.TheModelBillisaprogressivemove by Shri Narendra Modi Government since it enables the statesto choose to keep shops and other such establishments open 24×7 all through the year. This gave a substantial boost to employment generation and will also benefit the consumers in terms of more convenience and accessibility.

TheGovernmentofMaharashtraandGujarathasrecentlyamendedtheMaharashtraShops & Establishments Act 1948 in line with the Model Bill.

The Government should encourage and incentivize other states to adopt the Model Act. RetailbusinessesalsoneedEDC(ElectronicDataCapturemachines)foracceptanceof variousbankcardsandotherdigitalpaymentdevices.Thishelpsintheacceptanceofdigital

moneyandalsopromotesanaccountabletradingenvironment.Inouropinion,any

promotionoftheuseofPointofSalemachinesisagoodwaytomovethecountryand its

citizens towards a fully accounted economy.

Small traders have to be encouraged to use at least EDC machines so that they can accept digital payments without worry. Efforts should be made to ensure that all retailers in the countryuseEDCmachinesandalsothatthecostofacceptingDigitalpaymentsisnevermore than the cost of accepting cash. The Government may want to create free/subsidized dispensation of such machines in the country. This can be done in stages – around 25lakh machine stostart with can be a good start. It will also help government as these retailers will register under GST.

EffortsshouldalsobemadetoencourageretailerstogetPOSmachineswithgoodsoftware forsalesbillsandsalesaccounting.ReimbursementofmoneyforsuchPOStosmallretailers canbeagoodwaytoencourageadoption.Allthesesoftware’sshouldhaveaninbuiltsecurity system and robust accounting standards so that an audit trail of bills is feasible. Some care needs to be taken to certify acceptable POS machines and software.

IX.EPCG for Retail Sector

Wealsorecommendtoreintroduce“EPCGforRetailSector”,tocreatemoderninfrastructure in retail sector. Concessional duty benefits under EPCG scheme shall be extended for import or capital goods required by retailers having minimum area of 1000sq. meter.

X. Risks of Proposed GST Hike on Products based on price range

TheproposedGSTratehikeonapparel,footwear,handbags,cosmetics,watches,andotherpremium products could have significant repercussions on the formal retail sector and consumer sentiment. Such increases may jeopardize the formalization of trade, encouraging a shift toward unorganized markets.Additionally,thismoverisksunderminingtheGovernmentofIndia’sMakeinIndiainitiative, delaying the domestic growth of the retail sector and impacting employment opportunities. To achieve higher collections, the government should adopt a more balanced approach that safeguards the formal retail ecosystem and preserves consumer confidence.