New Delhi: Estimated to be $280 billion, retail accounts for over 10% of India’s GDP. Fuelled by increasing customer base, rising disposable income, changing lifestyles and growing absorptive power of the rural market, organized retail is likely to touch $30 billion in 2010 from a meagre $14 billion at present.
Dhruv Prashar, COO, DeCube Retail Plus
India is a fragmented market in terms of policy and economic laws at the state level, and varying regulations affect the industry’s competitiveness adversely.
Lack of quality logistics infrastructure hinders scaling up of retail operations. Approximately 37-45 licenses are required before one can get the start-up going. Additionally, the tax structure which is still complex and evolving, creates even greater challenges for retailers.
The current transport infrastructure in terms of the road and rail network is being strengthened but an accelerated track should be taken to realize the benefits of having a streamlined supply chain. There should be a single window clearance model for licensing requirements, if the retail sector is to get organized and efficient.
Reforming land use regulations, including Urban Land Control Ceiling and Regulation Act and Rent Control Act will simplify usage and increase transparency for retail operations in renting places.
The state governments should implement a uniform VAT policy, and deploy resources to increase collection efficiency. Also, octroi tax should be immediately repealed to unite national markets.
Dhruv Prashar is COO, DeCube Retail Plus