Ease of doing business for MSMEs: So far, 1,58,319 kirana stores nationwide have opted to become an MSME through Udyam registration since the government revised MSME guidelines last year. Former Minister of MSMEs, Nitin Gadkari, in July 2021, had announced the inclusion of retail and wholesale trade in the definition of MSMEs to benefit 2.5 crore of retail and wholesale traders under loans to the priority sector (PSL) of the banks.
“To increase the registration of kirana shops, this ministry (MSME) has included retail and wholesale businesses as MSMEs and allowed them to be registered on the Udyam registration portal. However, the benefits for retail and wholesale MSMEs should be restricted to priority sector lending only,” Minister of State for MSMEs Bhanu Pratap Singh Verma said in the Lok Sabha.
According to the Reserve Bank of India, PSL is targeted at sectors that impact large and weaker segments of the population, and other employment-intensive sectors such as agriculture and micro and small enterprises . Export credits, education, housing, social infrastructure, renewable energy, etc., benefit from loans at concessional rates under the PSL by banks outside agriculture and micro and small units.
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It is important to note that wholesale and retail traders were previously classified under the definition of MSMEs until 2017 when they were removed from the scope of MSMEs. According to the notification to the official journal of June 27, 2017, the retail and wholesale activities were neither manufacturing units nor service units according to the definition of the MSMED law 2008. Therefore, they did not have was able to obtain the old Udyog Aadhaar Memorandum license to register as an MSME.
As of November 2021, 5.33 lakh wholesale and retail trade registrations on the Udyam portal have been registered since July 2021, MSME Minister Narayan Rane informed Parliament in December. The portal had recently crossed the 1 crore registration mark, including MSMEs and other businesses. As of August 7, 2022, 1.01 crore businesses had registered on the Udyam portal, of which almost 96 lakh were micro, 3.98 lakh were small businesses and 38,152 were medium businesses.
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