India, August 31, 2020: The Ministry of Home Affairs (MHA) Order dated, 29 August 2020, comes as a silver lining to the Indian retail industry that has been battling localised lockdowns across several States. The order asserts that ‘State/ UT Governments shall not impose any local lockdown (State/ District/ sub-division/City/ village level), outside the containment zones, without prior consultation with the Central Government’. This comes in the face of the weekend and partial lockdowns that were being implemented at the local levels despite MHA orders to keep retail open on all days, which suggested a gap in coordination between centre and states.
Commenting on this directive by the MHA, Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said, “We appreciate the efforts of MHA and DPIIT for taking steps to get the economy going. Livelihood is important and we believe that any shutdowns should be very carefully calibrated to ensure a balance between lives and livelihood. A central focus as compared to just local decisions is the need of the hour. We, at RAI, had shared our concerns in this regard with the DPIIT and the MHA and we are very glad about the outcome.”
For retailers, nearly 60%-70% of the costs are fixed. Of these, rents and salaries to employees make up a large part. In times like these, when the demand is inelastic, it is crucial to keep stores open on all days and for extended hours. Only this will help retailers crawl back from the financial distress they have been facing and encourage social distancing.
Retailers are majorly depending on the upcoming festive season for the recovery of the business. Boost to the retail industry will in turn benefit the entire value chain, which involves manufacturing, entertainment, right down to artisans and other micro-enterprises. Removing roadblocks at the local level will not only help retailers to plan better for the season but will also help them make decisions on hiring. It will also benefit taxes collected by the State Governments like GST, among others which is important to help revive the economy. Most importantly, it will be in the interest of consumers as it will bring convenience to them.
