Retailers, Wholesalers Now Classified As MSMEs: How Will It Help Them? How To Register?
With the continuation of ongoing efforts of the Government of India, to alleviate the stress on pandemic struck Indian economy, comes another major announcement. The government has said that from now onwards Retail and Wholesale traders will be considered as MSME (Micro, Small and Medium Enterprises). This move will enable them to avail benefits of the priority sector from banks and financial institutions.
Originally part of the MSME sector according to the MSME Development act 2006, retailers and wholesalers were dropped from the sector since 2017. But since the outspread of Covid-19 and lockdowns following it, the economy has taken a significant hit. Hence for reviving the economy and reducing the stress on Retailers and Wholesalers, the government seems to have taken this decision.
In recent times the government has taken many steps in reviving the economy, various steps announced under Atmanirbhar Bharat, are part of the larger picture. But non-inclusion in the MSME list, did not help the retailers and wholesalers in any way.
Now, according to reports, the revised guidelines will benefit more than 2.5 crore retailers and wholesalers. The move will have an immediate impact on all the retailers and wholesalers with businesses up to Rs. 250 Crore turnover.
In 2015, Central Government had introduced UDYAM Portal for all MSMEs. Now all the eligible Retailers and Wholesalers will be eligible to register on the same.
This move will help them get easier access to cheaper loans (under priority sector lending as per RBI norms), will streamline the tax rebate procedure, and help them get higher preference in getting government tenders.
How Industry bodies are responding to it
CEO of Retailers Association of India (RAI), Kumar Rajagopalan, said that “This landmark decision will have a structural impact for the sector, helping it get formalized 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”
Confederation of All India Traders (CIAT) also welcomed the move stating that this will have a huge impact on small businesses in the country. CIAT lauded the decision emphasizing inclusion in the priority sector. “The Covid pandemic affected traders will now be able to restore their businesses by obtaining necessary finances from the banks which were earlier denied by the Banks,” CIAT statement read.