Currently, India is the fifth largest retail market in the world. The market size in 2008 was estimated at $511 bn.
Retailing has played a major role the world over in increasing productivity across a wide range of consumer goods and services.
In the developed countries, the retail industry has developed into a full-fledged industry where the organised sector accounts for almost 80% of the total retail trade.
In contrast to this, in India, organised retail trade accounts for merely 5 per cent of the total retail trade and is expected to grow at the rate of 30 per cent to 40 per cent. However, during the medium term, the growth rate in this sector has slowed down to 7 per cent to 10 per cent owing to economic slowdown.
Despite it being a tough year for the retail sector, India tops the rankings of A.T. Kearney's Global Retail Development Index. As compared to other emerging markets, India has a more stable and stronger economy and the penetration levels are low. Due to these reasons, India is still the most attractive destination for international retailers looking at expanding into emerging markets.
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Increased exemption limit in personal income tax by Rs 15,000 for senior citizens and by Rs 10,000 for all other categories of individual tax payers. |
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Customs duty on unworked corals to be reduced from 5% to nil. |
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Customs duty on serially numbered gold bars and coins increased from Rs 100 per 10 gram to Rs 200 per 10 gram. Customs duty on other forms of gold increased to Rs 500 per 10 gram from Rs 250. These increases are also applicable on ornaments imported as personal baggage. |
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Excise duty on branded articles of jewellery to be reduced from 2% to nil. |
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Fringe benefit tax (FBT) abolished. |
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Rate of minimum alternate tax (MAT) on book profits has been increased from 10% to 15%, but with a provision of carrying forward the tax credit on MAT to ten years from the current seven years. |
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Discretionary spending is directly linked to income in the hands of the people. Increase in disposable income is expected to result in increased spending on lifestyle products. |
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In general, increased consumption is expected to boost the growth of the retail sector. |
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Retailers like Pantaloon Retail, Shopper's Stop, Trent and Titan would stand to gain on account of increase in disposable income. |
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Abolition of excise duty on branded articles, increase in customs duty in case of gold bars, coins and ornaments is a positive move for the organised jewellery retailers. Titan Industries would gain a competitive advantage. | |
