RBI includes retail, wholesale trade under MSME category
The Reserve Bank of India (RBI) recently notified the inclusion of retail and wholesale trade under the micro, small and medium enterprises (MSME) category, which is expected to help 2.5 crore retail and wholesale traders benefit from priority sector lending under RBI guidelines.
The revised guidelines will also allow them to register on the Udyam portal for MSMEs.
The notification comes after former Union Minister of MSME Nitin Gadkari said in a tweet on July 2:
"Retail and wholesale trade were left out of the ambit of MSME. Under the revised guidelines, MSME has issued order to include retail and wholesale trade as MSME and extending to them the benefit of priority sector lending under RBI guidelines."
With this development, Indian retailers and wholesalers can apply and avail of various schemes and relief packages the Indian government has rolled out for the MSME sector.
The move was welcomed by the trading community, which has been struggling to cope with the financial impact of the COVID-19 pandemic.
In a statement, Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said, "We thank Hon’ble Minister - MSME, Shri Nitin Gadkari, for giving a patient ear to RAI to understand the plight of MSME retailers and delivering on the assurance he gave us during our virtual meet last year."
He added, "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.”
According to the 16th edition of the ‘Retail Business Survey’ by RAI, the May 2021 sales of the retail industry — which contributes 10 percent to the nation’s GDP — recorded a significant decline of 79 percent as compared with pre-COVID level sales of May 2019, following the closure of retail businesses across the country.