Last year in 2020, the Government of India made several changes in Micro, Small, and Medium Enterprises (MSME). As per the change, the retailers are excluded from this giant section and even the small and medium enterprises have to show the annual turnover. RAI seeks restoration of MSME and for the same, the representatives have met with the MSME minister ‘Nitin Gadkari’. Asking for the revoke of the present MSME norms and urges to follow the older one where the retailers were part of MSME. In this article, we will discuss RAI Seeks Restoration Of MSME Status For Retailers.
Why are the Retailers opposing the new MSME norms?
The MSME sector loan comes under the Priority Sector Lending in which the interest rate is minimum. This simply means that small and medium businesses can easily get the loan at a good interest rate.
But due to the outburst of Coronavirus, the Government has removed the retailer from the list of MSME. This decision creates havoc among the retailers because they are facing a loss in the business. However, if they need a loan for the business recovery, then they will have to pay a heavy interest rate to the financial institutions.
Voice of Retailers
The Retailers Association of India is stating that the retailers in the country play a crucial role in macroeconomics and to cherish the growth of a Nation, the Government must support them.
RAI represents around 6534 retailers and each one is requesting the Government to revoke the present MSME laws. They need support from the Government because coronavirus has put a deep impact on their business.
Why Implemented new laws in MSME?
The loan of MSME comes under the PSL, where the interest rate is quite minimal. Every nationalized bank has to spend 40% of their loan on priority sectors that include the agricultural sector, and labour-intensive businesses. The aim is to give smooth financial ways to these sectors so that they can contribute to the Nation’s GDP. Their growth is important because the agricultural sector is the primary one and the contribution to the Country’s GDP is around 15-18%.
Notification by Central Government
The current notification was published in the Gazette of India. And it clearly defines that the retailers are not a member of MSME and can’t get Udyog Aadhar Memorandum. The CEO of RAI, ‘Kumar Gopalan’ has kept the demand in front of the MSME minister and it is still under consideration.
Contribution of Retailer in Indian’s Economy
In India, there are around 500,000 stores and 6534 small and medium retailers. They also create 43 million jobs directly and indirectly. Thus, the contribution of retailers in Indian’s Economy is significant, and even after a year of coronavirus, the growth of small and medium businesses has increased. It is expected that the second wave of the coronavirus won’t affect retailers severely.
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