Budget 2022 Expectations: ‘Need initiatives that encourage widespread adoption of technology for small retailers’

India is the world's fifth-largest retail market. Given that retail is one of the economy's fundamental pillars, the Indian government should improve all segments of the business in Budget 2022, expects Prem Kumar, Founder & CEO, SnapBizz.
By directly impacting people's lives, the retail industry generates $883 billion annually. According to IBEF, it accounts for nearly 8% of the country's GDP. Nasscom estimates that by 2030, the industry will have created 2.5 crore jobs through new offline and online retail formats, he further added.

“The retail infrastructure is a well-oiled machine with a high level of efficiency, which enables sachets to be sold for as little as Re 1. The shampoo sachet is one of the most competitive and inclusive customer propositions, even in a village. This speaks volumes about the ecosystem's efficiency and inclusiveness, implying the possibility of optimising and improving it rather than establishing new ecosystems to serve customers,” Kumar added.

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“Indian retailers and distributors earn smaller profits than retailers and distributors elsewhere. In comparison to the global average of 30-35%, the average Indian shopkeeper earns a pitiful 10% profit margin on each sale. This system is primarily driven by the supply chain ecosystem, but also by the financial ecosystem, which can be used to accelerate financial inclusion. As a result, the Budget should contain initiatives that encourage widespread adoption of technology,” he said.

SMEs and MSMEs require a level playing field in order to collaborate with large retailers on a digital level. Increased exposure for the business translates into increased access to working capital. While the government should work to improve the digital infrastructure, it should also take care not to disrupt the highly efficient supply system that already exists. If that is jeopardised, the common man, who earns barely enough to meet basic needs, would bear the brunt, he added.

Kumar said: “Retail technology is the way forward, and policy-supported innovation will help the industry re-establish its footing and contribute more to the Indian economy. Budgetary support for digital solutions for retail would ensure that even small retailers, such as the more than 10 million ‘kirana’ outlets, can implement digital solutions aggressively and sustainably."