Over 1.5 lakh kirana stores in the country have opted to become an MSME through Udyam registration since the government revised MSME guidelines last year, Minister of State for MSMEs Bhanu Pratap Singh Verma said.
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,” Verma said in the Lok Sabha.
Priority Sector Lending (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.
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.
Government Policies
The Government of India has designed various policies for the growth of MSMEs in the country which are following.
As of March 2022, the number of loans sanctioned under the Pradhan Mantri MUDRA Yojana (PMMY) scheme was 48.92 million and the amount disbursed was INR 3,02,948.49 crore (USD 39.90 billion).
In the Union Budget of 2022-23 MSMEs sector was allocated an Emergency Credit Line Guarantee Scheme (ECLGS) of INR 50,000 crore (USD 6.55 billion).
On March 30 2022, the Indian government allocated INR 6,062.45 crore (USD 808 million) for the scheme Raising and Accelerating MSME Performance (RAMP). The programme aims to improve market and credit access, strengthen institutions and governance at the centre and state levels, improve centre-state connections and partnerships, resolve late payment difficulties, and green MSMEs.
In November 2021, the government launched the Special Credit Linked Capital Subsidy Scheme (SCLCSS) for the services sector. This scheme will help enterprises in the services sector meet various technical requirements.
