RAI Urges Government To Lower Interest Rates And Implement National Retail Policy Ahead Of Union Budget

The Retailers Association of India on Wednesday urged the government to lower interest rates for retailers to facilitate easier access to financing. They also called for the swift implementation of a national retail policy to enhance the ease of doing business ahead of the upcoming budget.

In its pre-budget memorandum, RAI emphasised that the Union Budget for fiscal 2025-26 should prioritise boosting demand and stimulating consumption by offering tax benefits or concessions, which would improve overall consumer sentiment and support the retail sector.

Asking for low-cost finance from retailers, RAI said, "There is a need to provide lower interest rates to the retailers through the special announcement in the budget to assure easier financing for the retail businesses."

The government should allocate a special fund and formulate a special trader finance scheme with SIDBI to help millions of independent retailers across the nation by declaring low-cost loans and relaxing some industry guidelines, it added.

Demanding the retail sector be considered as an essential service, RAI said, "The F&B retail sector needs to be considered as a priority and an essential service. Subsidies and benefits should be given on land rates and other necessities such as electricity."

Stressing the need to expedite the National Retail Policy to enable ease of doing business, the association said, "There is a need to expedite the formulation and implementation of national policy. We believe that such a step would provide a substantial boost to the retail sector and facilitate ease of doing business."

RAI also called for the extension of all MSME benefits to retail traders. While the government has recognised retail and wholesale trades as MSMEs and allowed them to register on the Udyam Registration Portal, the benefits for retail and wholesale trade MSMEs are currently limited to priority sector lending only.

"We recommend that retail and wholesale traders should be eligible for all benefits available to other MSMEs," it added.

The retailers' association also raised concerns with the government about the potential risks of a proposed GST hike on products based on price range. They warned that increasing rates on apparel, footwear, handbags, cosmetics, watches, and other premium products could have a major impact on the formal retail sector and consumer sentiment.

"Such increases may jeopardise the formalisation of trade, encouraging a shift towards unorganised markets,' RAI said, adding, 'To achieve higher collections, the government should adopt a more balanced approach that safeguards the formal retail ecosystem and preserves consumer confidence."

(With inputs from PTI.)