The Retailers Association of India (RAI) works towards creating a favorable climate for the modern retail industry in the country. Kumar Rajagopalan, CEO, RAI, spoke to Moneylife’s Priyanka Desai on the various challenges — and opportunities — facing the industry. This is the concluding part of a two-part series
Priyanka Desai (ML): Are there any key issues that RAI is concentrating upon currently?
Kumar Rajagopalan (KR): There are some issues worth talking about. RAI will definitely work towards helping usher in the Goods & Services Tax (GST), which will bring in efficiency.
We also want a change in the Weights and Measures Act, 1976. This Act is of little relevance to today's age and time. It was enacted when the country was going through a paucity of resources, across levels. Currently the country is facing paucity at very few places so the rules made (back) then are of no use now. It is more of a hindrance now. It is also allowing a lot of people to mis-utilize the power vested in them.
We also need a common Shops and Establishments Act across states. For example, not every state allows shops to be open 365 days. It is essential to take care of the people working in a store, making sure they have their mandatory employee leave and that work timings are favourable. It is also essential to understand that retail is a business which works more when people have a holiday, so when a state enacts a law to keep shops shut on Sunday, it is very detrimental for commerce and has a big impact on GDP. We have again made a submission to the government and are trying to bring in a uniform code.
The next thing is women in the retail workforce. Retail can accommodate more than 50% of workforce as women. Women have a natural flair for service industries, and retail is a true service sector. But some states may not allow women to work, let's say, beyond 8pm.
In an urban region where most shoppers arrive between 7.30pm to 8pm, it is very painful not to be able to employ women during peak hours. Thus rules of such nature have to be reformed, like they were for the BPO industry, to make women more independent.
ML: You earlier mentioned that retail is not even an industry right now. Could you please elaborate?
KR: Retail is a state subject and not an industry currently. It is not under any specific ministry. Any ministry can stake its claim on it; any ministry can reframe rules, but no ministry currently says "they are under us". At some point they own us, at some point they don't.
ML: Where is the big growth coming in currently? What are the overall trends that you are observing?
KR: The growth is still predominantly in big cities. Tier-I cities have the most potential. (But) there are two factors curtailing further expansion of retail in Tier-I cities, one is availability of good commercial space and two is high rentals. Since we do not have any zoning capabilities in the country it is more worrisome. Had the government made reservations for shopping centres - like for green spaces - and if they had given out those reserved spaces at reasonable rates to retailers, the consumer could have had much better choice. It's all about (the marriage between) retail and entertainment, which I call 'retainment'. If you want to improve lifestyle, 'retainment' centres have to be built. Malls have become the 'retainment' centres of today. But they are discouraged, not encouraged, by authorities. For example, malls pay more taxes, higher electricity bills, etc.
ML: A few retail analysts say that this festive season will be good for the retail sector compared to last year, but margin dilution is on the cards due to inflation. Do you agree?
KR: No. As of now, I think consumer confidence is high despite inflation. Most retailers have been exhibiting double-digit growth numbers. We do not see why the festive season will not go well this year. In fact, we believe that consumers who could not spend in full strength last year will shop with some additional vigour this year. We have seen that September has been a high-growth month for the automotive industry - this is an indicator that other sectors will follow this trend as well in the upcoming festive season.
The market witnessed a highly choppy session today. Although the indices opened firm, they were in and out of the red quite a few times and ended with cuts of nearly a percent at the end of the day.
The Indian market opened in the green and touched the day’s high in initial trade on supportive global cues. The indices soon witnessed a sharp fall to enter the negative zone and were seen hovering on both sides of the neutral line. However, buying in middle-rung stocks improved sentiments in post-noon trade with the indices nearly touching the day’s highs. Profit booking surfaced once again dragging the sharply indices lower to end the session down nearly 1%.
The Sensex closed 185.76 points (0.92%) down at 19,983, below the psychological level of 20,000. The bellwether index touched a high of 20,332 and a low of 19,923 during the session. The Nifty settled above the crucial 6,000-mark at 6,027, down 48.65 points (0.80%). The index swung between a high-low of 6,127 and 6,008, respectively.
The losers outnumbered the gainers today. The Sensex had 24 declining stocks against six gainers. The Nifty ended the session with 40 losers and 10 advancing stocks. The broader indices outperformed the key benchmarks today — the BSE Mid-cap and the BSE Small-cap indexes closed with gains of 0.24% each.
The gainers on the Sensex included Hero Honda (up 1.53%), Cipla (up 1.51%) and ACC (up 0.63%). Infosys Technologies (down 3.05%), Hindalco Industries (down 2.23%) and DLF (down 2.19%) were the prominent losers today.
The top sectoral performers were BSE Healthcare (HC) (up 1.06%), BSE Auto (up 0.28%) and BSE Fast Moving Consumer Goods (FMCG) (up 0.06%). The losers in the sectoral space were led by BSE IT (down 2.22%), BSE Realty (down 1.75%) and BSE TECk (down 1.73%).
Markets in Asia finished mostly in the green on optimism gained from Citigroup’s earnings numbers. However, technology stocks were impacted by poor sales of the iPod. Meanwhile, analysts are forecasting a correction after recent gains logged by the regional bourses.
The Shanghai Composite gained 1.58%, Hang Seng rose 1.25%, Jakarta Composite was up 0.73%, KLSE Composite advanced 0.54%, Nikkei 225 was up 0.43% and Straits Times added 0.35%. On the other hand, Seoul Composite tumbled 0.97% and Taiwan Weighted lost 0.18%.
The Telecom Regulatory Authority of India (TRAI) today said it would come out with the second generation (2G) spectrum pricing norms by the end of this month.
The new norms are likely to link pricing of 2G spectrum to the 3G spectrum licence after the controversial allotment of 2G spectrum in 2008, which many in the industry felt, was under-priced to help certain telecom operators.
Earnings report from Citigroup propped US financial stocks resulting in the indices closing in the green on Monday. Investors braced themselves for earning reports from Apple and IBM, which were announced after trade closed for the day. Besides, the National Association of Home Builders said its housing-market index rose three points to 16 in October, the first improvement in five months.
The Dow gained 69.63 points (0.63%) to 11,132. The S&P 500 added 5.56 points (0.47%) to 1,181. The Nasdaq added 5.03 points (0.20%) to 2,474.
Foreign institutional investors were net buyers of stocks worth Rs335 crore on Monday. Domestic institutional investors were net sellers of equities worth Rs1,218 crore on the same day.
New Delhi: Gold prices surged by Rs135 to Rs20,085 per ten grams in the national capital today on emergence of frantic buying by stockists and jewellers to meet ongoing festival and marriage season demand, reports PTI.
Gold is just Rs35 short of the Rs 20,120 per ten grams record last seen on 15th October.
Besides, silver spurted by Rs575 to its record high of Rs37,000 per kg on hectic buying by industrial units and coin makers for the auspicious festival of 'Diwali.'
Precious metal prices also shot up on buying by investors, who preferred to park their funds in bullion instead of volatile equity markets.
Gold of 99.9% and 99.5% purity rose by Rs135 each to Rs20,085 and Rs19,985 per ten grams respectively.
Sovereign also rose by Rs300 to Rs16,000 per piece of eight gram, a level never seen before.
Silver ready spurted by Rs575 to Rs37,000 per kg and weekly-based delivery by Rs685 to Rs36,390 per kg. Silver coins rose by Rs100 each to Rs36,100 for buying and Rs36,200 for selling of 100 pieces.