Mumbai: With no mention of the retail industry in today's budget, organised retailers consoled themselves by saying that in the long term the trade would derive benefits from tax incentives and development programmes which would boost spending by the common man.
The trade was expecting industry status as well as easing of foreign direct investment norms, but it was disappointed by the lack of any mention of these aspects in the budget.
"It is not a very inspiring budget," Reliance Retail Limited's president and chief executive (lifestyle) Bijou Kurien told the Press Trust of India. "The retail sector has been clamouring for some kind of industry status and the issue not being touched upon is a disappointment."
Aditya Birla Retail CEO Thomas Varghese said the finance minister's silence on (easing) FDI norms in retail was a dampener. "I feel the finance minister should have also done away with service tax on rentals, which is currently at 12.5%," he said.
Subhiksha Trading Services managing director R Subramanian said the lack of clarity on FDI norms was certainly a "negative".
"It is a good budget, but it could have been better. FDI norms have not been touched upon. There were no sops for the retail industry in terms of allowing for greater penetration, despite retail providing employment to a large number of people," Vishal Retail Group president Ambeek Khemka said.
But Future Group founder and chief executive Kishore Biyani said the abolition of the fringe benefit tax (FBT) and scrapping of the 10% surcharge on personal income tax would leave more money in the hands of consumers.
"Increasing expenditure in infrastructure and hiking the income-tax ceiling will increase consumption, which is good for [retailers like] us," Biyani said.
While they hailed the scrapping of the surcharge on income tax as a "positive development", the corporate sector felt that it, too, should have been allowed a slice of the pie.
"I think the surcharge should have gone for corporates [sic] also," Videocon Industries chairman VN Dhoot said. "The abolition of FBT and CTT is the only good thing that has come out of this budget, but there is nothing for the short term."
Infiniti Retail CEO Ajit Joshi termed the customs duty of 5% on import of set-top boxes (used for the conditional access system) as a negative. "However, it is a positive budget overall," he said. "Slashing the customs duty on LCD TVs to 5% from 10% earlier was a good move. I hope the manufacturers help us pass this benefit on to the consumers."
Source:www.dnaindia.com