New national retail policy: Licence rationalisation among five focus areas

Setting up a shop or department store requires 24 to 57 licences, with the compliance burden having grown in the past few years
The government had identified five areas in its proposed national retail policy, Anil Agrawal, joint secretary in the department for promotion of industry and internal trade (DPIIT), Ministry of Commerce, said on Tuesday. Agrawal was addressing delegates at the Confederation of Indian Industry’s (CII’s) virtual retail summit, saying a discussion paper had been launched and that the final stages of revision would be undertaken shortly.

The five areas that would be addressed in the policy are ease of doing business, rationalisation of the licence process, digitisation of retail, focus on reforms and an open network for digital commerce.

“Offline retail and e-commerce have to be looked at in an integral manner. There is also a need for skilling and reskilling the retail workforce,” Agrawal said.

Setting up a shop or department store requires 24 to 57 licences, with the compliance burden having grown in the past few years.

The need to unwind the knots in retail has been necessitated owing to its importance in the country’s economy. Retail is India’s third-largest sector, showed a report by consultancy firm Kearney released at the CIl summit. Growing at the rate of 10-11 per cent in the past few years, its pace has now slowed to about 9 per cent, due in part to the Covid-19 pandemic, which has curtailed business activity.

Of the segments seeing a surge in business include channels like e-commerce, which has been growing at the rate of 28 per cent per annum. This came as digital adoption continued to increase in the pandemic and post-pandemic world, Kearney said.

Modern trade and general trade, on the other hand, have been growing at the rate of 10 per cent and 8 per cent each per annum, the consultancy said, with the need for a truly omni-channel play to be adopted by retailers for future development and growth.

Also, close to 50 million people were employed in the country’s retail sector, implying that jobs had to be protected and nurtured, even as digitisation improved efficiency, experts said.

Shashwat Goenka, chairman of the CII national committee on retail, said the industry had the potential to create an additional 3 million jobs, if a cohesive national retail policy was introduced in the country. Goenka is the head of the retail and fast-moving consumer goods verticals at the RP-Sanjiv Goenka group.

“Moving forward, as the industry revives from its slump, new and emerging models need to be deliberated in order to accelerate the recovery process. The industry is still hampered by the loss in demand. Therefore, proactive steps need to be taken in order to revive consumer confidence," Goenka said.

The national retail policy was expected to address concerns of small and medium retail entrepreneurs who had borne the brunt of the lockdown and pandemic, analysts said.

“The government has always been proactive for the retail sector and has taken several measures to help create a robust environment which has allowed retail to thrive. However, now as we recover from the pandemic, a policy-led approach where the industry and government work together cohesively will allow the retail industry to bounce back and grow exponentially in the years to come," Goenka added.

The Kearney report says that improving access to capital, especially for traditional retailers, rapid adoption of technology and modernisation by offline players, bridging logistics and supply chain infrastructure gaps, and enhancing labour participation and productivity are some of the building blocks for the future.

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