The consumer and retail sector showed tremendous signs of recovery in the previous year. However, with the sudden spurt in COVID-19 cases recently, concern has risen with regards to the growth momentum of this industry. Budget 2022 holds great hope and significance for a complete revival of the sector.To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a pre-budget consumer and retail sector survey.
Commenting on the survey results, Naveen Malpani, Partner and Consumer Sector Leader, Grant Thornton Bharat said, “The consumer retail sector is hoping for the implementation of a National Retail Policy, and an efficient tax refund process to prevent credit blockage. With the right government support, private sector players are willing to invest more in building efficient supply chain infrastructure as well as technology innovation to improve global competetiveness.”
According to the pre-budget survey, 54% feel that more skill development initiatives are required to make MSMEs more competitive globally. They are the backbone for the sector and with the right talent they can provide exceptional results. With regards to Aatmanirbhar Bharat and to promote growth in domestic manufacturing, 41% of the respondents wish for rationalisation of basic customs duties on certain imports, after taking into consideration the FTA benefits. This was followed by 30% wishing for the implementation of the National Retail Policy, to strengthen and boost the retail ecosystem and facilitate ease of doing business.
Looking at the success of the PLI (production-linked incentive) schemes, the survey also hinted on government to consider rolling it out to new sectors like toy manufacturing (20%), footwear (23%) as well as personal care and cosmetics (37%). Talking about GST law, almost half the respondents said that they needed more clarity on input tax credit, followed by supply and value of supply. 50% also wish for Income Tax special exemptions to enhance and boost spending capacity of the people in the current fiscal. More liquidity in the hands of consumer has a direct positive impact on the consumer and retail sector since it increase the consumer propensity to spend.