The Indispensable Role and Plight of Shopkeepers: Bridging the Gap in India's Retail Landscape

Shopkeepers in India, comprising over seventy million small-scale merchants, stand as the linchpin of the retail sector, bridging the gap between consumers and sellers nationwide.

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Derogatory treatment towards the integral role of shopkeepers, often evidenced by the offensive use of terms like "dukandaari," highlights a concerning disregard for these individuals despite their pivotal position in India's retail landscape. Shopkeepers in India, comprising over seventy million small-scale merchants, stand as the linchpin of the retail sector, bridging the gap between consumers and sellers nationwide.

These enterprising individuals are the cornerstone of the retail trade, collectively commanding an impressive ninety percent share, showcasing their profound impact on India's economy. Often referred to simply as shopkeepers, they serve as the vital link facilitating transactions and seamlessly integrating into every aspect of society.

Despite their critical role, the retail market in India has witnessed fluctuations, especially during the disruptive phase of the pandemic. According to data from Forrester Research, India's retail market, valued at $883 billion in 2020, experienced a slight decline from its 2018 worth of $950 billion due to pandemic-induced disruptions.


Grocery retail constituted a significant portion, amounting to $608 billion. However, optimistic forecasts project a remarkable surge, estimating the market to reach $1.3 trillion by 2024 and a staggering $1750 billion by 2026. Shopkeepers, holding a substantial 75 to 78 percent share of the consumer goods market due to their diverse product offerings, emerge as pivotal contributors to this growth trajectory.


India's burgeoning retail sector, contributing 10% to the nation's GDP and employing 8% of the workforce, reflects the country's status as a thriving retail hub. However, the retail landscape is witnessing transformative changes, with intense competition between global and local retail giants vying for consumer attention. Consumer preferences shifting towards spacious supermarkets or online shopping have led to a decline in foot traffic at local stores.


The pandemic-induced lockdowns forced street corner shopkeepers to shut their stores abruptly, causing significant financial losses and necessitating swift adaptation strategies amid uncertainties. The flourishing e-commerce industry, captivating consumers with diverse product offerings and rapid delivery services, has seen substantial growth.


While industry giants like Inc and Walmart's Flipkart maintain dominance, smaller startups have introduced app-based services, enabling daily deliveries of essential commodities. Although e-commerce presently constitutes a modest 5-6% of India's retail sector, projections indicate a staggering growth rate, expecting the market to reach $200 billion by 2026.


The pandemic presented formidable challenges for shopkeepers, from labor shortages to disrupted supply chains, intensifying financial hardships and impacting savings. Fast Moving Consumer Goods (FMCG) companies faced supply chain paralysis, leading to considerable delays in product deliveries due to reverse migration exacerbating labor shortages.


These resilient shopkeepers and retailers encountered numerous challenges amid the pandemic, lacking efficient home-based selling platforms. However, leveraging smart technology can circumvent business slowdowns. Embracing appropriate technology and tools facilitates adherence to social distancing norms while fostering business growth.


Moreover, the derogatory treatment towards shopkeepers, exemplified by terms like "dukandaari," undermines their integral role and contradicts the law's mandate. Recognizing these adversities, a proposed Act aims to establish a welfare fund, offering support during challenging times and stipulating penalties for derogatory usage, reaffirming shopkeepers' significance and resilience.


In essence, this Act strives to safeguard the rights and dignity of shopkeepers, acknowledging their indispensable role in India's economic fabric. It emphasizes respect and recognition, fortifying their resilience and fostering a more equitable and inclusive retail ecosystem.


This article based on the proposed legislation introduced by Dr. Ashok Kumar Mittal, MP, Rajya Sabha aims to establish a Shopkeepers' Welfare Fund and a corresponding Board entrusted with administering the Fund. The primary objective of this Bill is to safeguard the welfare of shopkeepers and to deter the derogatory use of the term 'dukaandari' to uphold the dignity of these individuals.


Clause 3 of the proposed legislation focuses on the establishment of a Shopkeepers' Welfare Fund, aiming to cater to the welfare needs of shopkeepers. Clause 4 pertains to the formation of a Board responsible for overseeing the administration of the Shopkeepers Welfare Fund.


Furthermore, Clause 7 stipulates that the Central Government will be responsible for providing adequate financial resources to the Board to ensure the effective implementation of the Bill's provisions. It is noteworthy that if enacted, this Bill will involve expenditure from the Consolidated Fund of India.