Retail traders are sceptical about the skill upgradation and allied plans mentioned in the State Budget 2024 for the retail sector, with the general refrain being that ‘these plans too will remain on paper as during previous years’, even as a sum of ₹3 crore was earmarked in the Budget to bear the initial expenses of a project to see traders out of the red.
In addition, the Budget spoke of forming an expert committee to study and submit a report regarding the State‘s retail trade sector. Referring to widespread concern among traders about big retail chains, shopping malls, and online marketplaces making inroads into their share of business, Finance Minister K.N. Balagopal said during his Budget presentation that such big players utilised newest of technologies and also had the benefit of economy of scale, both of which were not enjoyed by the smaller brick and mortar shops which conducted trade through traditional means.
As a solution, he said the economy of scale could be enjoyed by traders through the formation of groups by purchasing commodities together on a large scale from manufacturers and by improving supply chain management systems like logistics and inventory management. He went on to state that universities and management institutions would be able to formulate the technical framework to adapt digital technology, modern management techniques, and Artificial Intelligence. A sum of ₹3 crore was earmarked to bear the initial expenses, while an expert committee would be constituted to study and submit a report on the the retail trade sector.
The sum of ₹3 crore was far too meagre and would have to be spent on the expenses of the expert committee itself, said C. Chandy, treasurer, Kerala Merchants Chamber of Commerce. “No government wants to incur the wrath of corporate retailers who are thriving at the cost of small and medium retailers who are finding it tough even to pay rent. Over 10,000 shops were closed in the State in 2023, while double the number would down shutters this year if the government failed to take remedial steps. Innumerable traders are caught in debt and are even selling their houses. Frequent amendments to GST rules and the high cost of living in Kerala have compounded matters for them,” he added.
Very soon, well-heeled traders from other States could dominate many sectors in Kerala. They would in turn pump in their earnings back to their home States. The least that the State government could have announced in the Budget was a health insurance and pension scheme for traders and their employees, which was a long-pending demand, he said.
Maintaining that traders did not get their rightful due in the Budget, the Chamber, however, welcomed the announcement of an amnesty scheme to settle pre-GST era tax dues.
Most retail traders were in crisis and were opening their shops just to stay afloat, said G. Karthikeyan, who owns a spares and service dealership for household appliances in Kochi. “Rather than announce piecemeal measures in the Budget, the government should have come up with practical solutions to help traders whose plight worsened after the floods and the pandemic. The demand by trade bodies for loans at low-interest rates fell on deaf ears, while banks were unwilling to extend loan without government guarantee. All this has taken a hefty toll on their business, with the result that traders from other States are steadily fortifying their presence here,” he said.
Sadeek Abdullah, a wholesale-cum-retail dealer of toys, said the Budget announcements would in all probability remain on paper since many of the promises in the 2023 Budget remained unfulfilled. “All that the traders have been demanding is a practical way out of the mess they are encountering owing to the market situation and government policies. The impending strike by a section of traders on February 13 [in protest against the alleged apathy of the State government and its policies] is to highlight this,” he said.
