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Kirana stores to get a shield against Flipkart, Amazon

The proposed exercise is aimed at consistency, simplification & low compliance burden to cuty costs.

Updated: Nov 20, 2019, 03.50 PM IST
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As part of the exercise, the Department for Promotion of Industry and Internal Trade (DPIIT) has asked the states to embark on a count of such stores.
NEW DELHI: India is preparing a national retail framework for small neighbourhood stores to ensure they can better cope with competition from ecommerce platforms, which have been gaining ground. The programme could include one-time registration fees, soft loans for working capital and support to adopt electronic payments.

“Work has started on a national framework that states can adopt,” a government official told ET. Retail is a state subject and each one of them follows varying policies with regard to the sector.

As part of the exercise, the Department for Promotion of Industry and Internal Trade (DPIIT) has asked the states to embark on a count of such stores.

Domestic trade contributes about 15% of India’s $2.7 trillion GDP with more than 60 million business enterprises across the country.

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Move to Cut Costs
According to estimates, domestic trade provides a livelihood to about 250 million people and is growing at 15% annually.

Most states have a shops and establishment legislation under which such stores are registered. The registration policy, fees and other compliances vary. Registration is annual in some states and every five years at others.

The proposed exercise is aimed at consistency, simplification and a lower compliance burden in order to lower costs. Under consideration is online enrolment for lifetime registration, said the person cited above.

“We are looking at issues that small shopkeepers face and how those can be addressed,” the official said. “We are also looking at (whether) they can be provided soft loans, assistance to adopt digital payment mechanisms.”

Almost 65% of 70 million such stores are not digitally enabled, according to Praveen Khandelwal, secretary general of the Confederation of All India Traders (CAIT) lobby group, which has been at the forefront of complaints against ecommerce companies. It has accused them of disregarding the rules to offer discounts. The ecommerce companies have said they are compliant with the rules.

The government and retailer groups have also discussed the idea of the state becoming guarantor for loans. That will allow banks to offer credit at lower interest rates and needing less documentation.

The DPIIT is in the process of expanding the National Trader Welfare Board to make it more broad based, the official added.
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