Ease of Doing Business for MSMEs: 1,58,319 kirana stores in the country so far have opted to become an MSME through Udyam registration since the government revised MSME guidelines last year. Former MSME Minister Nitin Gadkari in July 2021 had announced the inclusion of retail and wholesale trades under the MSME definition to benefit 2.5 crore retail and wholesale traders under priority sector lending (PSL) by banks.
“To increase the registration of kirana stores, this (MSME) ministry included retail and wholesale trades as MSMEs and allowed them to be registered on Udyam Registration Portal. However, benefits to retail and wholesale trade MSMEs are to be restricted to Priority Sector Lending only,” said Minister of State for MSMEs Bhanu Pratap Singh Verma in the Lok Sabha.
PSL is for sectors that impact large and weaker sections of the population, and other sectors that are employment-intensive such as agriculture, and micro and small enterprises, according to the Reserve Bank of India. Export credit, education, housing, social infrastructure, renewable energy, others, are given loans at concessional rates under PSL by banks apart from agriculture and micro and small units.
Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises
Importantly, wholesale and retail traders were earlier categorised under the MSME definition until 2017 when they were moved out of the MSME ambit. As per the gazette notification dated June 27, 2017, the retail and wholesale activities were neither manufacturing units nor service units according to the definition of MSMED Act 2008. Hence, they were not able to secure the erstwhile 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 were recorded since July 2021, MSME Minister Narayan Rane had 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 nearly 96 lakh were micro, 3.98 lakh were small enterprises, and 38,152 were medium businesses.
