Revising guidelines for MSMEs, retail and wholesale trade has now been included as Micro, Small and Medium Enterprises, Minister of MSME and Road Transport and Highways, Nitin Gadkari announced on Friday. This would mean that retail and wholesale trade will also now be able to avail benefits such as priority sector lending under RBI guidelines.

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According to the minister, the revised guidelines will benefit 2.5 crore retail and wholesale traders and will also allow them to register on the Udyam portal.

Retail and trade associations welcomed the move, saying that this will enable traders to get access to much-needed capital having been impacted greatly due to the COVID19 pandemic. Several measures announced for the MSME sector over the past year will now be applicable to retail and wholesale traders as well.

This move is also likely to enable smaller retailers and traders to avail of the Resolution Framework for COVID-19-related stress announced by the Reserve Bank of India wherein MSMEs with aggregate exposure of up to Rs 25 crore and classified as standard as of March 31, 2021, can avail of this restructuring scheme without being downgraded to another category of asset.

Kumar Rajagopalan, CEO of Retailers Association of India (RAI) said that this is a major boost to smaller retailers across the country, especially since this has been a specific ask of the industry since last year. Currently, 95 percent of the retail industry in the country are MSMEs and this move is set to benefit 13-14 million retailers in India.

“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,” he said.

The move has an immediate impact on smaller retailers with businesses up to Rs 250 crore of turnover in availing immediate-term finance as part of various schemes announced under Atmanirbhar Bharat, Rajagopalan said, adding that there could be a delay in the announcement and what retailers get on the ground since it’s not a priority sector and there is now clear assessment methodology available with banks to make this happen.

However, larger benefit is in the long term, he added, since it will get retailers a benefit to get registered under MSME schemes hence formalizing more businesses.

The Confederation of All India Traders (CAIT) too, welcomed the move and said that will benefit over 8 crore small businesses in the country.

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.

“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,” CAIT added.

(Edited by : Yashi Gupta, Abhishek Jha)

First Published:Jul 2, 2021 2:14 PM IST