Preparations are ongoing for the upcoming budget for FY 2025-26, that is supposed to be presented in Parliament on 1st February 2025. Various trade bodies and organisations are as usual on toes to approach the government for favourable announcements.
Retailers Association of India (RAI) has shared its Pre-Budget Memorandum 2025-26 and recommends that the Government should consider some points for the growth of the retail sector. The trade body has asked the Government to consider 10 points with some of them being related to apparel and fashion retail.
It has been said that the proposed GST rate hike on garments, footwear, and fashion accessories like handbags etc. could have significant repercussions on the formal retail sector and consumer sentiments.
To achieve higher GST collections, a more balanced approach will safeguard the formal retail ecosystem and preserve consumer confidence.
To increase retail and consumption, the Budget should have a focus on offering benefits or concessions in the form of lower taxes. For the ease of industry,the budget should prioritise simplified regulations, skill development and simple GST.
Low-cost finance to retailers and allocation of a special fund and the formulation of a special trader finance scheme with the Small Industries Development Bank of India (SIDBI) can support small retailers too.
Expediting the National Retail Policy to enable ease of doing business and extending all the MSME benefits to retail traders are also major concerns.
Currently, the Government has included retail and wholesale trades as MSMEs and they are allowed to be registered on the Udyam Registration Portal but benefits to retail and wholesale trade MSMEs are restricted to Priority Sector Lending only. RAI recommends that retail and wholesale traders should be eligible for all benefits available to other MSMEs.
