New Delhi: Amid subdued consumer spending and inflationary pressures, the retail industry is pinning its hopes on the Union Budget 2025, set to be presented on February 1 in the Parliament by Finance Minister Nirmala Sitharaman to reignite demand and spur growth. Industry leaders are calling for bold fiscal measures to boost consumption, enhance affordability, and create a conducive environment for businesses to thrive.
From tax incentives and GST rationalization to expanded support for rural markets and digital infrastructure, leaders’ demands from the second full budget of Modi 3.0 reflect the urgent need for reforms that can revitalize consumption and address structural challenges.
Saugata Gupta, MD and CEO, Marico emphasized the importance of tax relief measures for middle-class and salaried individuals to boost disposable income, translating into higher demand, thereby boosting economic activity, especially in urban India. He further noted that simplifying the tax regime will additionally ease compliance and strengthen supply chains, benefiting both consumers and businesses.
Rajeev Gupta, CEO of RSWM highlighted the impact of inflation on manufacturers and consumers alike.
“A rationalization of GST rates to lower slabs can mitigate input cost pressures on manufacturers and reduce end-product prices, making textiles more affordable. This measure is critical for stimulating demand across domestic and international markets, ensuring the entire value chain benefits from higher consumption,” Gupta suggested.
Industry leaders unanimously agreed on the need to boost rural consumption through infrastructure development and targeted support. Gupta called for increased capital expenditure on rural roads, electricity, and connectivity to improve market access for textiles, while Marico’s chief executive underscored the need for investments in rural distribution networks and employment generation to uplift agricultural and non-farm economies.
Dr Puneet Mansukhani, Partner – digital advisory and global head retail, KPMG in India stressed the importance of digital infrastructure investments, tax incentives for retailers, and policies for boosting consumer spending.
“To address high inflation, the government should implement supply-side reforms and adjust monetary policies as needed. Given the pressure observed in urban markets over the past year, targeted support for urban buyers is essential,” he said adding that skill development programs and easier access to credit to the retail sector can also foster revitalization and drive economic growth.
Gupta from RSWM and Gupta from Marico both emphasized the need to expand the PLI scheme across sectors, including textiles and FMCG. This, they argue, will enhance India’s manufacturing capabilities, attract foreign investment, and reduce reliance on imports.
Gautam Bali, MD of Vestige Marketing called for streamlined regulatory processes and tailored incentives for MSMEs. Bali emphasizes the importance of reducing operational challenges and fostering ethical business practices to drive self-employment and economic empowerment, particularly for youth and women.
Yogesh Chaudhary, director, Jaipur Rugs advocated for targeted subsidies, skill development, and digital integration to support artisans and small businesses in the handmade carpet industry.
“Amid economic challenges, we seek fiscal measures that foster long-term growth, promote skilled artisans, and ensure fair wages. Targeted subsidies for small businesses, skill development, and access to international markets will strengthen the sector,” he opined.
The retail industry’s collective demands point to a need for a budget with growth-focused initiatives. Leaders believe that addressing high inflation, stimulating demand, and creating jobs are essential to address current economic challenges but also unlock India’s retail potential.
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