India experienced a difficult economic phase in the year gone by, with the depreciating rupee, fall in exports and decrease in investments underlying concerns of a slow-down. Small business, in particular, felt the pinch. So in this gloomy scenario, booming E-commerce industry expects a strong and quick regime from this Union Budget.
“We expect the Union Budget for 2013-14 to make provisions for more firm, concrete steps towards the development of the economy. India does not need a budget of assurance, but of action. While the budget will be presented when the world economy is at its slowdown, we are still hopeful that the new proposed initiatives in the budget will boost the manufacturing and services sector, especially in the MSME sector, says Khalid Isar, Country General Manager, Alibaba.com India.
“As far as expectations are concerned, I hope the Budget this year brings in policies and taxation schemes which benefits the e-commerce sector and SMEs, insists Kiran Murthi, CEO of getiitBazaar.com.
Attention to MSMEs ans SMEs
The MSME sector in India is large and has been a significant contributor to exports with a 40% share and provides employment to 60 million persons through 26 million units as per the latest report of Prime Minister’s Task Force on MSMEs. The sector’s contribution to GDP is expected to touch double digits from the previous 8%.
“In a country like ours where MSMEs play a tremendous role in the growth of the economy, it is important that special focus should be given to Infrastructure development that can enable them to grow. For me a good budget will be the one that takes into account faster implementation of Delhi-Mumbai industrial corridor, a plan announced in 2006. Our MSMEs face a humongous expansion challenge and we need such industrial townships to ease their growth concerns. A township with high speed freight line, better connecting to the country’s political and financial capitals, more internet connectivity, robust power plan and less set-up approvals will be ideal for any MSME,” insists Brijesh Agrawal, Co-founder and Director, IndiaMART.com.
“We are, therefore, hopeful that as the Finance Minister focuses on reviving investments in the manufacturing sector, the government will also undertake initiatives to ease funding and cash flows for MSMEs as well as focus on cluster development and skill development programmes,” says says Khalid Isar, Country General Manager, Alibaba.com India.
The allocation of INR 5000 crores to SIDBI to set-up the India Opportunities Fund for investments in MSMEs was a step in the right direction; and we hope to see a continued commitment from the government in growing this sector that contributes significantly to the GDP of the country.
Implementation of the comprehensive GST will indeed prove to be an important tax reform for us. After the implementation of GST, we will be able to pass on the benefits in terms of savings on products to customers and that will promote growth in this sector. “Logistics is an integral part of any business, and e-commerce is no exception. For a lack of efficient and cheap logistics, the government should invest in infrastructure and enable easy, efficient, reliable connectivity within India. Better logistics is required for e-commerce businesses/ SMEs to flourish in Indian rural heartlands. The growth for these two entities (e-commerce & logistics) must be simultaneous,” explains Khalid Isar, Country General Manager,
A boost to retail e-commerce will give a boost to the SMEs. The biggest problem for the SME to sell all India is the inter-state transaction documentation that restricts ecommerce transactions for SME. Also simplified tax structure will breathe a fresh lease of life into the small and medium-scale sector. Online shopping is truly catching on in India. According to Assocham, estimated revenue from this sector is expected to be about $15 billion by 2015. There are over 100 million Internet users in India and this number is expected to cross 350 million by 2015, which will make India the second-largest Internet country in the world after China.
One of the major drivers for this growth will also be the strengthening of the Indian economy, leading to a higher disposable income in the hands of people who will then be more open to shopping on the internet. The other important factor will be stricter regulations on online transactions by the government, reducing frauds and resulting in trust building for the medium.