A simple, standardized retail policy to help accelerate India’s economic growth

Despite a consistent 10 per cent annual growth over the past few years, India’s retail sector has not been able to achieve the same level of growth as Malaysia and Thailand. Now, the pandemic has forced around 7 lakh small retailers to permanently shut down operations, reports Economic Times. Though the Indian government has launched several initiatives to boost the sector’s growth in past decade, it needs to introduce a cohesive National Retail Policy that promotes inclusive growth amongst all key players.

The report says the policy needs to introduce a single window clearance system for retailers planning to open a new store. It also needs to digitalize the approval process to make it more speedy and transparent. Also, the process needs to be time bound and easily renewable. The government can also use e-governance and digital tools for inspection/audits to make the process more efficient.

The policy should also focus on launching flexible loans for kiranas, partnering Finetech startups to assess credit worthiness and incentivizing organizedA simple standardized retail policy to help accelerate Indias economic growth players to extend credit to smaller players.

Digitization to help double retailers’ profitability

Digitization can help traditional retailers grow revenues by around 30 per cent. It can also double their profitability. However, the digitization process is often hampered by a lack of capital, capabilities, and awareness. Government can help such retailers by launching new digital solutions and providing them tax breaks or subsidies for adopting digital tools. With an investment of Rs 12,000 crore, the government can modernize over 10 lakh retailers. It can also encourage private players / start-ups to collaborate with traditional traders to further increase their reach.

Infra development to reduce cost Lack of efficient warehousing, cold-storage, and transportation facilities often increases the overall logistics costs of Indian products by around 5 to 8 per cent than global counterparts. Therefore, the National Policy needs to invest in the development of new warehouses, cold storage and other logistics-related infrastructure. This will reduce retailer’s costs by up to 2 percentage points besides improving their service to consumers.

Simplfy labor laws

India’s current skilling programs fail to provide employment to laborers. The policy to needs to clarify and simplify laws related to part-time and gig retail workers. It needs to encourage flexible work hours and part-time work. The policy also needs to incentivize employers to implement comprehensive childcare systems which would help improve women participation in retail by 5-10 per cent points. Scaling up skilling programs and vocational courses can also the government upskill India’s workforce.

As the retail industry has a major impact on the Indian economy. Its growth policy needs to be simple, standardized and digitized. This will not only create 30 lakh more jobs but also help the sector realize an additional growth of up to 2 per cent by 2024.