Prime Minister Narendra Modi on Saturday described the decision to include retail and wholesale trade as MSMEs as a ‘landmark step’. “This will help crores of our traders to get easy finance, various other benefits and will also help in promoting their businesses,” PM Modi said.
Union Minister Nitin Gadkari on Friday announced the inclusion of retail and wholesale trade under MSMEs (Micro, Small and Medium Enterprises), according to which traders will now get the benefit of priority sector lending under the RBI guidelines.
“Retail and wholesale trade were left out of the ambit of MSMEs. Under the revised guidelines, the Ministry of MSME has issued an order to include retail and wholesale trade as MSMEs and give them the benefit of priority sector lending,” said Nitin Gadkari, who also said that the inclusion would benefit 2.5 crore retail and wholesale traders, and they will now be able to register on the Udyam Registration Portal.
What does this move mean?
The move has an immediate impact on small retailers and wholesalers with a turnover of up to Rs 250 crore in availing immediate term finance as part of various schemes announced under Atmanirbhar Bharat.
Retail and trade associations welcome the move
Retail and trade associations welcomed the move, saying it would help traders to get access to the much-needed capital having been impacted greatly due to the COVID19 pandemic. Several measures announced for the MSME sector in the last year will now be applicable to retail and wholesale traders as well.
This decision will help businesses to get structured
This landmark decision will have a structural impact on the sector, helping to formalize it by offering better finance options for businesses that want to get structured. It will give the support to retail MSMEs that they need to survive, revive and thrive.
Retailers and wholesalers can avail benefit of ECLGS Scheme
The move will not only help small traders to get loans from banks and financial institutions, but it will also make them eligible for several government schemes which till now extended only to the MSME sector. A week ago, the Finance Ministry extended the Emergency Credit Line Guarantee Scheme (ECLGS) to Rs 4.5 lakh crore, mainly for the MSME sector. Now, retailers and wholesalers can also avail this credit line to promote their businesses.