NEW DELHI: Four years after excluding it from the micro, small and medium enterprises segment, the government on Friday announced a wholesale trade In the category, making institutions eligible for priority sector financing from banks and special liquidity schemes.
This step, which MSME Minister Nitin Gadkari Said that 2.5 crore enterprises will benefit, which came after months of inter-ministerial wrangling with multiple wings of the government burdening each other, and even Reserve Bank of India He refused to play the ball until the government reworked its rules.
In fact, at one time, agencies within the government argued that retail and wholesale trade were not “services”, although they were classified in that category globally as well as in India.
This was despite the government including retail and wholesale trade enterprises in the MSME Development Act, 2006, until it was removed in 2017 on the recommendations of a committee.
The problem came to the fore when the government reworked the turnover limit last year and a new electronic registration process was introduced using GST and Permanent Account Number. While retailers and wholesalers who had registered till 2017 were eligible under the earlier system, the new system would have stopped them.
Terming the Centre’s move as “wonderful”, industry bodies on Friday said the decision would help in formalizing the sector.
Besides access to priority sector credit from banks, retail and wholesale business enterprises can avail other schemes for MSMEs.
Under the new rules, commercial banks will have to extend an amount equal to 40% of adjusted non-bank credit or off-balance sheet exposure (whichever is higher) to agriculture, MSMEs and weaker sections. Of the total, 7.5% have to go to small businesses.
This step, which MSME Minister Nitin Gadkari Said that 2.5 crore enterprises will benefit, which came after months of inter-ministerial wrangling with multiple wings of the government burdening each other, and even Reserve Bank of India He refused to play the ball until the government reworked its rules.
In fact, at one time, agencies within the government argued that retail and wholesale trade were not “services”, although they were classified in that category globally as well as in India.
This was despite the government including retail and wholesale trade enterprises in the MSME Development Act, 2006, until it was removed in 2017 on the recommendations of a committee.
The problem came to the fore when the government reworked the turnover limit last year and a new electronic registration process was introduced using GST and Permanent Account Number. While retailers and wholesalers who had registered till 2017 were eligible under the earlier system, the new system would have stopped them.
Terming the Centre’s move as “wonderful”, industry bodies on Friday said the decision would help in formalizing the sector.
Besides access to priority sector credit from banks, retail and wholesale business enterprises can avail other schemes for MSMEs.
Under the new rules, commercial banks will have to extend an amount equal to 40% of adjusted non-bank credit or off-balance sheet exposure (whichever is higher) to agriculture, MSMEs and weaker sections. Of the total, 7.5% have to go to small businesses.
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