Budget 2025 : What Indian consumer and retail sector wants from Union Budget

The Indian consumer and retail sector has outlined several key expectations from the Union Budget 2025, focusing on measures to boost consumption, enhance competitiveness, and support economic growth. One of the primary demands is the rationalization of GST rates on essential goods such as apparel, footwear, and FMCG products. This could make these items more affordable, thereby driving consumer demand. Additionally, addressing the inverted tax structure, allowing GST credit refunds upon store closures, and permitting the transfer of GST credit balances between registrations are seen as steps to reduce operational costs for businesses, enabling them to offer more cost-effective products to consumers. These measures are expected to enhance consumer confidence and stimulate spending, aligning with the government’s broader economic objectives of fostering a robust retail environment.

The sector also emphasizes the need for strategic initiatives to support small and medium-sized enterprises (SMEs) and startups, which are crucial for job creation and economic dynamism. Providing accessible financing options and incentives is seen as a way to stimulate growth, particularly in the context of challenges like rising inflation and slowing investments. Furthermore, the expansion of the Production Linked Incentive (PLI) scheme to include high-demand sub-sectors within the consumer goods industry—such as home appliances, personal care products, and small consumer electronics—is a significant recommendation. This expansion is projected to attract substantial investments, drive industrial output, and create over 1 million jobs within five years, particularly benefiting the semi-skilled and unskilled workforce. Such measures are expected to reduce import dependency and strengthen India’s domestic manufacturing capacity, addressing demand-supply gaps for consumer goods.

The rise of quick commerce platforms, growing at a 25% CAGR, has also been highlighted as a transformative force in the retail landscape. However, there are calls for regulating these platforms to ensure a level playing field, particularly to safeguard the livelihoods of over 30 million Kirana stores and 8 crore small retailers and distributors. Enhanced oversight is expected to promote ethical and transparent operations while fostering sustainable competition. Additionally, the sector seeks increased investments in digital infrastructure, skill development, and MSME promotion to boost spending, especially in rural areas, where consumption has shown resilience with a 6% year-on-year growth in volume sales. Continued support for rural infrastructure, digital penetration, and affordable product offerings is deemed essential to sustain this momentum.

Overall, the consumer and retail sector's expectations from Budget 2025 revolve around tax reforms, regulatory support, and strategic investments to revitalize demand, enhance market resilience, and promote equitable economic growth. These measures are seen as critical for navigating the current economic challenges while unlocking the sector’s potential to contribute to India’s broader economic revival

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