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Government includes retail and wholesale trade under MSMEs: Read how it will benefit 2.5 crore traders

The decision comes at a time when the retail and wholesale business has taken a hit because of the coronavirus-induced lockdowns and restrictions, causing a severe liquidity crunch for the said businesses.

The central government on Friday revised its guidelines on MSMEs, including retail and wholesale trade as Micro, Small and Medium Enterprises, Minister of MSME and Road Transport and Highways, Nitin Gadkari said. The landmark decision means that retail and wholesale trade will also now be able to avail benefits such as priority sector lending under RBI guidelines.

“Retail and wholesale trade were left out of the ambit of MSME. Under the revised guidelines, the Ministry of MSME has issued an order to include retail and wholesale trade as MSME and extending to them the benefit of priority sector lending,” said Nitin Gadkari, who also added that the inclusion would benefit 2.5 crore retail and wholesale traders, and they would now be able to register on the Udyam Registration Portal.

Retail and trade associations have welcomed the move announced by the central government, stating that it would provide access to traders to the much-needed capital that had been impacted severely due to the COVID-19 pandemic. After their inclusion, several measures announced for the MSME sector over the past year will now be applicable to retail and wholesale traders as well.

The decision comes at a time when the retail and wholesale business has taken a hit because of the coronavirus-induced lockdowns and restrictions, causing a severe liquidity crunch for the said businesses. A survey conducted by the Retailers Association of India (RAI) said the sector, which is dominated by small traders, witnessed a contraction of whooping 79 per cent in terms of monthly sales in May as compared to pre-COVID levels due to lockdown-like restrictions imposed by states to blunt the second wave of coronavirus pandemic.

Retail and Trade associations welcome government’s move to include retail and wholesale traders within the ambit of MSME

The CEO of RAI, Kumar Rajagopalan, said the move is a major fillip to small retailers across the country since this has been the specific ask of the industry since last year. “This monumental decision will have a structural impact for the sector, aiding it to get formalised by providing better finance opportunities for businesses that want to get structured. It will give retail MSMEs the support they need to survive, revive and thrive,” he added.

The Confederation of All India Traders (CAIT) also welcomed the move. Praveen Khandelwal, Secretary-General, CAIT, said the demand for MSME status was on for more than a year and will benefit crores of small businesses. “The Covid pandemic-affected traders will now be able to restore their businesses by obtaining finances from banks, which was earlier denied to them. This will prove to be a milestone step in reviving not only the economy but even the retail sector,” Khandelwal said.

CAIT said in a statement that with this decision traders will be able to avail requisite finances from the banks and financial institutions under Priority Sector Lending along with several other benefits of various other Government schemes currently available for MSMEs. Khandelwal further added that the longer-term benefit of the move is that it would provide retailers a benefit to get registered under MSME schemes, hence formalising more businesses.

The move would not only help small traders get loans from banks and financial institutions, but it would also make them eligible for several government schemes that were hitherto extended only to the MSME sector. A week ago, the Finance Ministry expanded the emergency credit line guarantee scheme (ECLGS) to ₹4.5-lakh crore, mainly for the MSME sector. Now, retail and wholesale traders can also tap into this credit line to give a boost to their businesses.

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OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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