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Budget 2018: Retail sector hopes for the best
India's fast growing retail sector has been facing unprecedented situation ever since the government took two major initiatives - demonetization of higher order currencies and introduction of Goods and Services Tax.

While the former was intended to promote digital transactions and make India a cash-free economy, the later was to introduce centralized tax regime, both had bearings on the retail sector.

As impacts of varied degrees are still being felt by consumers and retail businesses, with Budget 2018 round the corner, Indian industry is pinning hopes on budgetary recommendations to ease out several pain-points being felt by retailers and consumers alike.

While the initiative to digitalize retail transactions across the country has created huge jump in digital transactions, the inefficiency of banks to provide adequate Point of Sale (POS) payment terminals to shop owners and high Merchant Discount Rates (MDR) have played spoil sport to India's cruise towards cash-free economy.

"The digital payment eco-system requires excellent infrastructure and support system to increase its usage and reach. The main issue is inadequacy of POS machines, which are not made-in India but have to be imported. To add to the woes of retailers and customers is the high MDR which has to be borne invariably by the customers when they make card payment every time. Though the RBI has recently reduced the MDR for payment up to Rs 2000, the government should remove MDR altogether to encourage more retailers to approach banks to install POS machines. Also, there should be more incentives for shoppers and merchants for adopting digital payments," says Bhaskar Venkatraman, CEO and Director of Millennium India, a pioneer in introducing POS machines to Indian retailers to automate their business.

The GST which was introduced with an intention of integrating all state and central taxes for goods and services and creating a uniform tax regime, still faces a lot of flak from people and merchants for keeping certain essential items on high tax brackets.

"There are still a lot of POS terminals and peripherals which are being imported after paying huge duties and taxes. The GST paid on POS machines supplied to merchants to automate their store operations are very high. This negates the very purpose of digitalization move as high cost discourages small and medium retail businesses, who form more than 80 per cent of retailers across India, from automating their store with digital transaction facility," feels Bhaskar, who was instrumental in launching India's first and exclusive ecommerce website ( for POS products to reach retailers in remote regions of India.

Though India currently has just over three million POS terminals as on November 2017, to fulfill the ambition of cash-free economy, the government should attract nine million more retailers by providing POS terminals free of cost to them, feels Bhaskar.

Also, since the Unified Payments Interface (UPI) system is emerging as a cheaper and scalable option due to rise in internet connectivity and penetration of smart phones, the government should promote it by easing norms to bring more players who can provide seamless digital transaction services.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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