With retail being the second largest sector in the country, the need of the hour is a retail policy which will define the role of the government and retail sector in Goa.
The Indian Retail industry is one of the top five retail industries of the world; and has emerged as the most dynamic and fast-paced sector. Retail accounts for over 8 percent employment and around 10 percent of India’s GDP. The retail sector in India is dominated by the unorganized retail trade which accounts for nearly 93% of the overall trade. The other challenges include lack of infrastructure and logistics, scarcity of skilled workforce, inefficient supply chain management., complexity in tax structure, etc.
NATIONAL RETAIL TRADE POLICY
Objectives of the National Policy are:
• To promote e-commerce all over the country.
• To encourage skill development and create more employment opportunities for all sections of society involved in retail trade.
• To identify and address existing infrastructure gaps affecting the retail trade industry.
• To accelerate investment flow to underdeveloped regions across the country.
With these objectives in mind, the Goa Chamber of Commerce and Industry (GCCI) in association with the Department of Commerce, S. S. Dempo College of Commerce and Economics have presented their inputs for the State Retail Trade Policy.
Manoj Caculo, GCCI President, in his letter to the Chief Minister Dr Pramod Sawant, states, “Amongst the various sectors of Goan economy, the retail segment is expected to see the highest growth. However, the lack of a formal retail policy for the State can hamper further growth of retailing business in the state. Goa is in need of a comprehensive and state-centric retail policy to address its specific concerns, focusing on both consumer and vendor protection and enforcement and timely redressal of issues at every level.”
“The State retail policy should serve as a regulatory framework that the retail sector shall abide by, clearly defining the role of the government and the retail sector in Goa.” Caculo emphasizes that the policy should provide a thrust to the retail industry for goods and services, considering the state-centric issues for sustainable growth and development. The policy should also pre-empt trade malpractices in the interest of the stakeholders and establish high standards of consumer protection through mechanisms of self-regulation by the retail industry.
KEY CHALLENGES FACED IN CARRYING OUT RETAIL BUSINESS IN GOA
1.Lack of policy framework.
2.Cumbersome Licensing and bureaucratic procedures.
3.Difficulties in availing business finance.
4.Complex labour laws.
5.Infrastructure issues.
6.Technological challenges.
7.Supply chain management.
8.Lack of trained human resource.
9.Heterogeneity.
10.Challenges in business finance.
11.Dominance of the unorganised sector.
12.Greater customer expectations.
13. Mobility issues and public transportation system in the state.
Hari Kaul, General Manager of CMM Mega Store and Chairman of the Retail Committee of GCCI, says that retail is the second largest sector in the country today as well as stands second when it comes to the contribution to the GDP of the country. “All stakeholders in the retail sector are suffering due to the lack of a proper policy. Our purpose behind this policy is so that all the stakeholders benefit from the same. The stakeholders are the investors in the business, customers who buy the products, employees who are working in retail and the Government. Customers need a proper portal in case they have any grievances; employees need to be made aware of their rights and investors need to make their business more viable, so that they are able to make a profit. There are many challenges that we have tried to address through this policy, and implementation will take some time. The Government will also benefit from the policy by way of proper taxes, once the retail sector is better organised.
Kirit Maganlal, CEO of Magsons weighs in with his opinion on why Goa needs a retail policy. “Across the globe, retail is one of the fastest growing sectors. We also see a lot of consolidation happening on the retail front. Unless this field is duly regulated and proper policy directions framed, we could see monopolistic and manipulative trends. A robust retail policy is the need of the hour to protect the interests of both, industry and trade and the consumers at large.” He also compliments the GCCI Retail Committee and Dempo College on their initiative.
The State Retail Policy inputs given in by the GCCI and the Department of Commerce touches on the following points and objectives:
1.To provide significant impetus to the growth of the retail industry in Goa with focused State intervention in the process of reducing trade challenges.
2.To streamline bureaucratic procedures impacting operational performance of establishments in retail industry in Goa through ‘Ease of Doing Business’ (EoDB) initiatives.
3.To bring about balanced development of trade and create a level playing field for various segments of retail trade in Goa.
4.To create large scale employment opportunities for youth in Goa through the channel of retail industry by supporting retail business and skill development initiatives.
5.To augment the contribution of the retail industry towards socio-economic development of Goa.
POLICY VALIDITY AND APPLICABILITY
The policy shall come into effect from the date of issue of the government order and shall be valid for a period of 10 years. A policy review shall be carried out at the end of the second year, post first time implementation; and every 3 years thereafter, to address the concerns of the stakeholders and amendments may be made as necessary.
KEY DRIVERS OF THE RETAIL POLICY
1.‘EoDB’ environment for retail industry in Goa.
2. Promoting entrepreneurship in the retail sector.
3. Creating large scale employment opportunities for youth in Goa.
4. Creating satisfied customer experiences for consumers.
5. Increase contribution to the state exchequer.
KEY INITIATIVES PROPOSED IN THE RETAIL POLICY 2019
1. Regulatory Authority
A state level self-regulatory body shall be set-up creating a task force comprising of an association of government representatives, voluntary retailers, academicians and other stakeholders, for creation of awareness on regulations/procedures to be adhered to for registration, licensing and other requirements. This self-regulatory body shall be called as State Nodal Agency for Retail Trade (NART).
ii. This body shall also look into the skill development needs of the retail sector, for both organised as well as the unorganised sectors.
2. Infrastructural Support
i. The state government shall identify zones for the state retail industry to set up business operations.
The town planning process for infrastructure development shall have a representation of retailers for matters pertaining to the retail industry, particularly with reference to the following:
a. Creation of parking facilities
b. Separate entry for goods in market places.
c. Loading and unloading bays.
d. Separate entry and exit lanes for vehicular traffic.
e. Planning for security and safety of people in designated market spaces.
f. Creating designated market spaces for vendors in unorganized retail sector.
g. Rescue and fire exit plan on each floor of large retail establishments.
iii. Restrooms shall be mandatory for retail establishments having an area of 5000 sq.ft or more.
3. Supply Chain and Logistics
The State Government shall facilitate an efficient system of supply chain and logistics through provisions for the following:
i. Transportation hubs: For efficient handling of retail cargo, the State shall invest in creation of transportation hubs in and around major cities in Goa.
ii. Parking For Trucks: carrying inter-state goods at designated locations based on density of retail locations.
iii. Regulated Timing System: to be implemented for the movement of transport vehicles carrying retail freight for an efficient distribution system and public convenience.
iv. Development of Port Infrastructure: by undertaking time-bound activities for improving terminal handling infrastructure, accessibility and connectivity.
v. Development of Warehouses: For facilitating storage of retail goods arriving from different parts of the country/state at reasonable rents. The focus of such development exercise shall be to reduce the number of intermediaries in retail supply chain.
ROLE OF THE STATE IN NATIONAL POLICIES RELATED TO RETAIL INDUSTRY
Through this policy, it is envisaged that the Government of Goa shall create an enabling environment for brick and mortar retail establishments by contributing to the central policy formulation through appropriate interventions to strengthen their competitive position vis-à-vis online retailers.
Particular matters on which the Government of Goa shall intervene include the following:
1. Pricing policy of online retailers where the State shall intervene to recommend policy norms with respect to minimum and maximum prices that can be charged for products by online retailers.
2. Regulation of exclusivity and discount offers of online retailers to create a level playing field for both the categories of retailers.
3. Capping the deep discount offers of online retailers to a certain percentage through a suitable mechanism.
4. GST compliance of online sellers attached to e-commerce organisations to be monitored by the government to establish price parity.
5. Revising accounting and tax treatment of transactions of e-commerce companies that are biased towards these companies. For example, amortisation of discounts as a marketing expense over future years creates opportunities for earnings management for e-commerce companies while the same advantage is not available to offline retailers.
6. Investment of online market places should be restricted in sellers businesses.
7. Establishing special consumer grievance cell in each district where online retailers sell goods through their online platforms
(Excerpts taken from the draft of Retail Policy for Goa 2019)
