MSME

Retail, wholesale traders now get MSME tag; opens bank credit lines

Meenakshi Verma Ambwani New Delhi | Updated on July 02, 2021

Nitin Gadkari

To benefit 2.5 crore traders and they can now register on Udyam Registration Portal.

Accepting a long-standing demand, the Centre, on Friday, included retail and wholesale traders under the MSME (micro, small and medium enterprises) classification making them eligible for priority sector advances by banks and financial institutions per RBI guidelines.

Minister of MSME and Road Transport and Highways Nitin Gadkari said the government has revised the guidelines, with the inclusion of retail and wholesale traders as MSMEs.

“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,” he said, adding that this would benefit 2.5 crore retail and wholesale traders, and they will now be able to register on the Udyam Registration Portal.

This comes at a time when retail and wholesale traders have been facing severe liquidity crunch after sales were hit by the Covid-induced local lockdowns. According to a survey by Retailers Association of India (RAI), the sector, dominated by which small traders, saw a 79 per cent contraction in monthly sales in May compared to pre-Covid levels due to lockdown-like restrictions imposed by States to curb the pandemic’s second wave.

Access to better finance

Kumar Rajagopalan, CEO of RAI, said, “This landmark decision will have a structural impact for the sector, helping it get formalised by giving better finance options for businesses that want to get structured. It will give retail MSMEs the support they need to survive, revive and thrive.”

The Confederation of All India Traders (CAIT) said the demand for MSME status was on for more than a year, and will benefit crores of small businesses. Praveen Khandewal, Secretary General, CAIT, said, “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 besides being able to get loans from banks and financial institutions, traders will now be eligible for several government schemes.

On June 28, the Finance Ministry increased the emergency credit line guarantee scheme (ECLGS) to ₹4.5-lakh crore, mainly for the MSME sector.

 

 

 

Published on July 02, 2021

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