My compliments to the Minister for performing on budgets, most of us in the industry when we achieve budgets we get big, fat bonuses, and we take our families for a holiday. I hope FM takes on one, which he deserves along with a big bonus (I hope PM is reading my note and recommendation), definitely. (Can we all clap for him, clap! clap! Clap!)
However we retailers got a miss again; even Chidambaram decided to not use the word ‘retail or retailer’ although he has done everything within his means to give a boost to consumption. I believe we retailers will be the beneficiary of consumption increase in the future and we all are the ever optimists who are investing in retail with full belief in the India consumption story.
This year’s budget addresses the consumer and consumption story to some extent by the following actions:
- Change in income tax slabs thereby giving extra discretionary income in the hands of the middle class.
- Eliminating the burden of debt from the farmers and therefore giving them peace of mind. This increases the possibility of their spending their future incomes on themselves and their families’ growth, thus increasing consumption at the rural level.
- Reduction in excise duties, custom duties, and CENVAT rates to the extent of 10-12% of the duties gives a reason for manufacturers to continue investment and increase supply.
Thrust on education is a very welcome move as educated youth, potentially earn more and therefore eventually spend more. The boost to the schools, colleges, universities will definitely make India a bigger domestic consumption story. I also hope the subsequent Governments will continue to push education especially vocational courses and basic education which can give job opportunities in the retail sector.
We also know that a healthy society is a happy society and a spending society. Concentration and fuelling the health and pharmacy sector is also a good boost to the long-term benefit of the retail sector.
Today’s budget definitely will fuel the Indian consumption story and the growth of 8%+ will continue to help Indian retail. All plans made by retailing companies should hold good and with most of the malls planned in the country springing up by 2010 we will see the Indian consumer getting a wholesome retail experience, whether it is shopping, movies or eating.
We retailers are definitely not happy that our simple demand of allowing us to adjust the service tax on rental against sales tax has not been heard, thus leaving us to take on the additional burden imposed last year, over and above the investments the retailers are doing to build modern retail in India.
We also believe that retail as an industry has again been given a miss by the GOI and the Finance Minister in spite of the fact that as the owners of last mile our contribution to the consumption story is very critical.
(BS Nagesh is the Customer Care Associate & Managing Director Shopper’s Stop Ltd)