Modi government plans to help small retailers digitize their operations
The government plans to help small retailers – a grassroots constituency of the ruling Bharatiya Janta party – by offering them grants to digitize operations and become part of the organized retail space, according to a senior government official.
The government is also considering a framework to fund swipe card machines or point-of-sale systems for small retailers to increase digital penetration, the official said on condition of anonymity. The subsidy can also be extended for the purchase of bookkeeping and accounting software used by traders, he said.
This would help them do business with many ecommerce players looking to register with these retailers, the official said.
Digitization and the shift to e-commerce platforms have boosted sales for small businesses by giving them access to more customers, according to a report by the Confederation of Indian Industry. The report’s findings showed that 46% of small businesses have experienced “significant growth” by adopting by adopting an online sales channel.
According to Praveen Khandelwal, general secretary of the Confederation of All Indian Traders, out of seven crore traders in India, only 7-10% have adopted the digital payment method,
Traders are reluctant to adopt swipe card machines because banks charge both customers and merchants around 1-2%, while traders have a low 3-5% margin, Khandelwal said. Instead of providing support for POS machines, banks should promote Bharat QR – a mobile payment system that allows a merchant to receive digital payments without the POS device – which comes at no cost, he said. he declares.
Digitization to help grow
Small businesses using digital platforms have doubled their income and gained better market access, according to a report from the Confederation of Indian Industry. About 51% of small businesses have increased their reach in different cities compared to offline businesses, he said.
Adopting digitized payment systems helps small and medium businesses extract value for their business, according to a report from Deloitte.
The committee set up by the Reserve Bank of India to deepen digital payments had suggested encouraging merchants to accept at least one digital payment method. It comes as India is expected to experience the fastest growth in the value of digital payments transactions between 2019 and 2023, according to KPMG.
National Council of Welfare to decide
The plan is part of a proposal that will be submitted to the National Council of Welfare which intends to identify and suggest measures for the welfare of traders. The council is made up of representatives from government and trade associations.
These proposals will be discussed at the first meeting of the board of directors, said the official quoted above.
The government is also considering accident and medical insurance for traders, a promise that also appears in the BJP’s 2019 election manifesto.
The Ministry of Industry Promotion and Domestic Trade has had discussions with 20 states on benefits ranging from insurance to qualification that should be provided to traders, the official said.
The BJP manifesto promised accident insurance of Rs 10 lakh to all traders registered with GST, and to create a system to give credit cards to traders registered on similar lines of a Kisan credit card for farmers. A Kisan credit card allows farmers to take advantage of quick loans at affordable rates.
Khandelwal said the government should guarantee a nominal insurance premium rate that traders can afford.