Ahmedabad: The Ahmedabad Chamber of Commerce Welfare Foundation (ACCWF) has submitted a representation to Prime Minister Narendra Modi on easing the structural stress due to compliance complexity, uneven competition, and limited access to formal credit and has urged to incorporate the issues into the upcoming Union Budget for 2026-27.
Chairman of ACCWF, Jayendra Tanna said that the retail trade sector forms the bedrock of India’s domestic consumption, providing large-scale self-employment, family livelihoods, and last-mile access to goods across urban and rural India. Despite its scale and tax contribution, the sector faces increasing structural stress due to compliance complexity, uneven competition, and limited access to formal credit.
“We seek policy support, not subsidies, to ensure fair competition and sustainable growth” added Tanna.
Key Budget Suggestions
1. MSME Credit Flow – Need for Segmentation and Targeted Fund Allocation
The recent enhancement in MSME classification limits, while progressive in intent, has led to an unintended consequence. Low-turnover retail traders and large MSME units are now being assessed at the same level by lenders, despite vast differences in scale, risk absorption capacity, and access to resources.
As a result:
Institutional credit is increasingly flowing towards larger and more stable MSMEs
Small retailers and low-turnover trading units, who are more vulnerable and genuinely in need, are being crowded out.Credit assessment has become volume-oriented rather than need-oriented.This situation is inequitable and contrary to the objective of inclusive growth.
Budget Suggestion:
Create a separate, ring-fenced fund allocation for MSMEs with turnover up to ¹ 100 crore
Introduce segmented lending guidelines for banks, clearly differentiating between:
Small retail & trading MSMEs Medium and large MSMEs.
Ensure priority credit, softer terms, and simplified appraisal for low-turnover and first-generation enterprises
Such segmentation will ensure that credit reaches those for whom MSME support was originally envisioned, while maintaining financial discipline for lenders.
2. Fair Competition and Market Balance
Small retailers cannot compete with capital-funded discounting and loss-led pricing models.
Budget Request:
Introduce a clear policy framework against predatory pricing applicable uniformly across all retail formats
Ensure competitive neutrality between physical retail and digital platforms
3. GST Simplification for Small Traders
Compliance costs and interpretational uncertainty have increased the burden on small businesses.
Budget Request:
Simplified GST compliance for small retailers with turnover-based relaxation National-level uniformity in GST interpretation
A trust-based, non-adversarial approach for small taxpayers.
- Inclusive Digital Transition
Rapid digitisation has imposed costs without adequate support.
Budget Request:
Budgetary provision for free or subsidised digital compliance tools Government-supported training programs for small retailers Strengthened multilingual helpdesks for GST and banking portals
5. Credit Access for Retail & Wholesale Trade
Despite steady cash flows, retail traders face difficulty in accessing timely working capital.
Budget Request:
Dedicated retail trade credit lines through banks.
Working capital loans based on GST turnover and transaction history Reduced collateral requirements for small traders.
- MSME Support Must Reach the Neediest
Expanded MSME limits have unintentionally shifted benefits toward larger entities.
Budget Request:
Introduce a need-based prioritisation framework within MSME schemes Ensure credit and incentives reach genuinely small and vulnerable units.
7. Recognition of Retail as a Core Economic Sector
Retail trade’s role in employment and consumption remains underrepresented in policy planning.
Formal recognition of Retail & Wholesale Trade as a core employment and consumption sector. Mandatory representation of retail trade bodies in policy and advisory committees
A resilient retail trade sector ensures stable consumption, local circulation of wealth, and social stability. Budgetary recognition of the sector’s realities will strengthen India’s grassroots economy and support inclusive growth.
