INTERNATIONAL BUSINESS IN SERVICE SECTOR.

HURDLES IN THE DEVELOPMENT OF INDIAN RETAIL INDUSTRY

PRESENTED TO : MRS. NEEJI PRESENTED BY : SURBHI SHARMA ROLL NUM. : 47 BBM(IB) SECOND YEAR-SEM:4TH NESS WADIA COLLEGE OF COMMERCE.

Hurdles in the Development of RETAIL INDUSRTY

Even though india has well over 14 million tetail outlets of all sizesand styles, the country surely lacks on number of hurdles in the development of indian retail industry. These hurdles are discussed at length in following paragraphs -

a) Lack of professional training: Retail has huge potential for providing employments, provided this workforce is adequately trained. Considering the potential of the industry we need to have more institutes and professional organization imparting retail education and training in India. retail industry has potential of offering employment to 4,00,000 new employees. Most of the retail are family owned and run on traditional methods of business. Professional training should be imparted to these business men.

b) Lack of FDI : The government has now allowed FDI that is helping retailing against the fear that small retailers is a technology oriented industry. The FDI helps achieve its motive of protecting the small retailers by not allowing DFI in retailing in the short run, but in the long run we will would also hinder the path of the domestic industry to become internally competitive. In order to facilitate faster growth and inculcation of better technologies, liberalization of FDI in retailing is imperative.

c) Non-industry status : despite significant effort, retailing has not been awarded with industry status due to which, there is no government sponsor trying to identify and resolve key bottlenecks and to allow for the rapid growth of the sector.
In India.

d) Lack of uniform tax structure : The national retailing chain is obstructed due to non-availability of uniform tax structure. Since retailing is essentially a business of supplying commodities to locations far from production facilities, a differential tax system in different states is creating hindrance in the fast development of this industry. The present retail chains, in spite of claiming to be national chains are restricted to certain regions of the country . Players are confined to state barriers. For organized retailing to truly take / exit taxes. Now improve as the retailers can sell the product at the same price throughout the country barring of course the incidence of octroi.

e) Lack of single window clearance mechanisms : Hypermarkets, typically, need to get over 16 licenses for stocking groceries, e.g. liquor and food products. This procedural and administrative process creates problems to retailer, as there is no single window where retailer can solve all his problems. Setting up of single window clearance mechanisms and a nodal department to reduce the constraints involved for modern format retailers is the requirements of the day .
e.g. of single window clearance mechanism in agriculture retail business

f) Restrictive labour laws : Indian stringent labour rules and regulations have restricted the development of retail industry to a great extent. The sector is unable to employ staff on a contractual basis.

This makes it difficult to manage 365 days a year operations. Retailers are required to take special clearance for extended working hours and round the year operation form the labour department.

The other major problems of Indian retail industry are:

1. Retailing in India is thoroughly unorganised. 2. There is no supply chain management perspective. 3. Smaller outlets are smaller than 500 square feet in area. 4. The geographical, cultural and socio-economic diversity of India. 5. Lack of role model of retail for Indian suppliers and retailers to adapt or expand in the Indian context.

Thank you..!