Industry status for retail will have to wait

THE retail sector’s demand for an industry status looks unlikely to be fulfilled in the near future, with the government still considering the implications of such a move. Speaking to ET¸ minister of state for commerce & industry, Ashwani Kumar, said, “Several representations on this matter have been made and we are studying the implications of granting industry status to retail as there are a host of issues involved including labour laws and other legal implications. We will not announce a policy unless we have studied the implications of the move fully.”
The absence of a retail policy delineating the country’s stand on retail is another issue which needs to be addressed before industry status is granted to retail. “There is no retail policy at the moment and we are moving gradually towards it with steps like allowing 51% FDI in single-brand retail. Until the full dimension of the retail policy is made clear, the question of industry status to retail trade may not be appropriately addressed,” he said.
The retail sector has been demanding recognition as an industry for over two years now. An industry status would not only make it eligible for fiscal benefits and concessions but also get it easier organised financing.
Mr Kumar said that the government is currently focused on opening up the sector and ensuring greater ease of functioning for retailers. “We are looking at how we can facilitate enlargement of economic activities in retail trade by ensuring greater ease of functioning,” he said. The commerce & industry ministry is considering various public-private partnership (PPP) models for encouraging investments in cold chains and warehouses to build backward linkages with farms.
On the Cabinet note floated by the department of industrial policy and promotion (DIPP) on allowing 51% FDI in consumer electronics and sports goods & accessories retail, Mr Kumar said that based on the success of liberalisation in multi-brand specialty retail in these categories, an extension into other similar categories would be considered. The opening up, however, must not be at the cost of jobs of those employed in mom-and-pop stores. “The loss of jobs is the main concern. We agree to a progressive liberalisation which yields more employment and greater investments. In consumer electronics and sports goods, there is no competition with smaller stores,” said Mr Kumar. courtesy:economictimes

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