Budget 2021: Reactions from the Indian Retail sector

The Indian Retail sector (sized at USD 854 bn) was one of the worst affected sectors due to the COVID-19 pandemic. Its ripple effects were felt by all stakeholders down the consumption value chain. While some recovery in demand was witnessed during the festive season, sustenance of this demand remains critical for the overall revenue prospects of the industry.

As India recovers from the COVID-19 pandemic, retailer’s expectations from Budget 2021 were clear: boost the local economy and help revive retail. As expected, the Budget initiated positive sentiments across all sectors and fully focussed on complete economic reset. Here’s a look at what retailers, retail solution providers and various brand heads had to say about Budget 2021.

Amit P. Kapani, Sewak, LPFLEX Sign System India Pvt. Ltd 

There are three key takeaways from the budget. 1. This is an expenditure and growth oriented budget i.e. government intends to spend on infrastructure projects. As signages and wayfinding play a part in every project, the move is expected to benefit the signages segment like us. 2. Recognition of the problem that fiscal deficit is on the higher side at 9.4%, however, the government hasn't panicked and increased the taxation of the HNIs and upper middle class income of the population. Though there is no tax cut, no tax increase during fiscal deficit is a welcome sign and a push towards spending.  3. Tax exemptions for Senior Citizens with pensions and interest and reduction of double taxation burden for NRIs could help the jewelry and luxury goods segments. Retailers would have been happy if there was a tax cut for people earning above 10 lakhs. 

On the whole, the budget seems to be in favour of growth for the retail segment, however, we need to read the fine prints to understand the budget in depth.

Shreesh Sharma, Director, GV Display Solutions

"The budget has been allocated well this time as in current circumstances, it would have been feasible for any government to get compelled and raise taxes which can otherwise stall the growth engine. The government has chosen growth over managing fiscal deficit and hasn’t been shy in raising inflationary expectations in the economy. However, being a manufacturing company, we feel that Modi Ji should give further thrust to 'Make in India' and hence give some tax sops and easy credit facilities to manufacturing companies" 

Kumar Rajagopalan, CEO, Retailers Association of India (RAI)

"Budget 2021 is growth-oriented, well-balanced and progressive. The big positives for retail are the overall thrust on ease of doing business and infrastructure development. Enhancing logistics capabilities for businesses is a welcome move as retail is heavily dependent on the easy movement of goods and people. Another big relief is that the government has not levied any tax to help cope with the additional financial burden on the economy due to the pandemic. Overall, it is a popular budget without being populist.”

Ravi Saxena, Managing Director of Wonderchef

The budget is on the expected lines of recovery and reforms as it focuses on Atmanirbhar Bharat through performance-linked incentives, mega textile parks, domestic manufacturing, improved credit access for enterprises and moratorium on interest payments. It also infuses a sense of positivity in the corporate sector by proposing the revision of definition under Companies Act, 2013 for small companies. Proposal to double the allocation for MSME and announcing the multi-state co-operative for ease of doing business will also give a major boost to the sector. Along with this, allowing and incentivizing one-person companies will also give a big push to the corporate sector. However, it would have added to the joy of the retail sector if the FM would have fulfilled the long-pending demand of rolling out the National Retail Policy

Adeeb Ahamed, Managing Director, LuLu Financial Holdings & Tablez Group

“The budget has balanced the pace of structural reforms, continuing spending on key infrastructure around transportation and real estate. The measures proposed will boost India’s progress towards becoming a self-reliant nation. The services sector contributes heavily to the country’s GDP, and the announcement to set up a social security net for gig economy workers and empower women to work in all categories, will encourage better diversity at workplaces and foster rapid innovation. Overall, this is a good budget for NRIs who wish to contribute to Digital India’s growth story.”

Arjun Ranga, Managing Director, Cycle Pure Agarbathi

"Budget 2021 looks promising, it will surely expedite the V-shaped recovery that we all are working towards. The initiatives taken to strengthen the global supply chain and upgrade the national fright corridors are commendable, this will highly impact businesses across sectors. The policies taken towards infrastructure will elevate India's stature to the global level. The budget has the potential of catalyzing the Sankalp of Nation-first. The policies announced by honourable FM will enable the initiative of AtmaNirbhar Bharat and boost domestic manufacturing. The doubling of MSME allocation to Rs 15,700 crore is a well-planned strategy to boost the sector and bring it to pre-covid levels. This budget will also strengthen our local handicraft market and support the artisans in this sector. The improved credit access for enterprises will also uplift the industry and generate employment in the country. FM's initiatives towards women empowerment ensuring their safety is another great step which, will be a game-changer for our country."