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Share of organised retail may rise to 20%

Share of organised retail may rise to 20%

Author | Source: The Economic Times | Monday, Apr 23,2007 9:31 AM

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Share of organised retail may rise to 20%

NEW DELHI: The organised retail sector is likely to increase its share from the current 4% to over 20% by 2010, as the overall retail sector grows from $328 billion to $430 billion, says a report on the retail sector released by Ficci.

In a bid to add momentum to the sector's growth, the chamber has recommended measures like granting industry status to the sector, allowing FDI, tax rationalisation and public-private initiative for creating trained manpower.

The industry body, however, sees no role for a regulator in this sector. According to the Ficci retail report, organised retail is likely to grow at a CAGR of 50% and set to be worth $90 billion by 2010. Organised retail has witnessed a CAGR of 35% over the past five years and currently accounts for 1.5% of the country's GDP.

According to the report, over $30 billion of investment is likely to be made in the next five to seven years, 92% of which is slated for urban areas. Of the urban investments, maximum is slated for the hypermarket (38%) and supermarket (28%) formats.

Specialty stores and cash-and-carry format are estimated to get a share of 22% and 16%, respectively, in the overall pie. Bigger cities are likely to corner 62% of the total investment expected to be made in urban retail. The report also suggests that India needs to generate at least 110 million sq ft of additional retail space a year for many years to sustain this growth.

Addressing a press conference on Saturday, Ficci secretary general Amit Mitra said, "Industry status to retail is the first basic step needed for reforming the retail sector. This would help the sector avail of organised financing and fiscal incentives."

The industry body has also proposed abolition of inter-state levies and rationalisation of the tax structure while recommending a public-private initiative for infrastructure development.

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