The Associated Chambers of Commerce and Industry of India has urged the government to confer industry status on retail so as to broad base the share of organizing retail in India to scale of economies. Currently, share of organizing retail stagnates at around 4 per cent and 96 per cent of retailing falls in un-organized sector.

In a note submitted to Ministries of Commerce & Industry and Consumer Affairs and Finance, the ASSOCHAM has stated that providing industry status should be the first basic step, needed for reforming the Indian retailing sector.

The advantages of such a status, according to ASSOCHAM would increase focus on retailing development and provide fiscal incentives for it, besides ensuring availability of organized financing and establishment of insurance norms, said ASSOCHAM Secretary General Mr. D.S. Rawat.

The Chamber has emphasized that industry status will help facilitate provisions of fiscal incentives to this high potential sector as has been in the case of hotel industry in which investments improved significantly after it was accorded industry status some time ago.

The note further says that fundamental issue is to bring the retail sector on par with other countries.  In the meanwhile, India needs to study the mechanism adopted by other countries as to how they have grown over the years in leaps and bounds and what sort of fiscal and regulatory mechanism they have adopted in their respective countries has also been stressed upon.

Also, the government should consider treating retail sector as thrust area – on the lines of food processing sector since retail has both forward and backward linkages and provide the much needed employment in the country.

ASSOCHAM also feels that development of this sector at a faster pace can take place if a comprehensive legislation is enacted to eliminate obtainment of multiple licensing.

The legislation so drafted should be simple and have a futuristic approach. It should take into consideration the developments that are taking place in this arena worldwide. The legislation should provide broad parameters within which the retail sector should operate and day–to-day functioning and other modalities be prescribed in Rules.

Retail operations currently need to obtain multiple licenses and permissions ranging from basic trading licenses to product specific licenses to pollution clearances.  Each individual retail outlet has to acquire these, even if it is a part of a chain.  These are irritants and add time and cost to process of establishing a retail chain.

It is important to ensure that clearances are required to be taken at one time only if it is a part of retail chain outlet. There should be a proper timeframe within which these approvals should be granted.  After the lapse of the stipulated time limit, the approvals should be deemed to have been granted unless there are some queries on the part of the Department.

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