There has been a consumption slowdown that's been playing out over the last couple of quarters. Owing to this India's consumer and retail sectors have been struggling. Growth has been muted and demand has been weak across the board.
One key ask for the sector from the government has been a stimulus package to revive demand. Measures to boost farmer's income could help increase spending in rural markets.
The rural market contributed about 60 percent to the slowdown, data from market research firm Nielsen showed. Significant slowdown was seen in north India for rural markets. Nielsen termed it as the "worst performance by rural in the last seven years." Expansion of personal income tax slabs is also on the budget wishlist for the consumer sector as it will help increase overall disposable income.
The micro, small and medium enterprises (MSME) food processing industry has been hit massively by the slowdown. As a consequence, the sector is seeking some tax and finance benefits for MSMEs. These could be in the form of tax holidays for manufacturing units across the country.
"Food processing units should be provided with a five-year tax holiday irrespective of location. MSME food industry should be given credit facilities for capex at low interest rates of 3 percent to 5 percent ," said the All India Food Processors Association in a note to the government. It has also submitted proposals for increasing export of food products.
The retail sector, which generates employment for a large number of small traders as well, is seeking a comprehensive national retail policy. This policy could lay out the framework for ease of doing business in the sector. It could also provide assistance in the form of special impetus for small traders. This could be in the form of cheaper finance.
Digitisation of transactions for small traders can also help drive business for the community. The sector is seeking installation of point of sale (POS) machines at outlets to help drive digital transactions.