Credit and finance for MSMEs: Gross bank credit (non-priority) deployed to the retail and wholesale trade in the country in November 2022 jumped 16 per cent year-on-year (YoY) to Rs 7.33 lakh crore from 10.2 per cent during November 2021 at Rs 6.32 lakh crore, according to the sectoral deployment data by the Reserve Bank of India (RBI). Among wholesale and retail trade, which were brought under the MSME category in July 2021, retail trade was deployed Rs 3.79 lakh crore in November, up 21.9 per cent from Rs 3.11 lakh crore deployed in November 2021. In comparison, Rs 3.53 lakh crore was deployed to wholesale trade (other than food procurement) in November 2022, increasing by 10.3 per cent from Rs 3.20 lakh crore in November 2021.
Also read: FE Exclusive: Loans to retail, wholesale traders under CGTMSE to be treated at par with other segments
After inclusion under the MSME definition, the government had further eased credit access for retail and wholesale traders by treating them at par with other borrowers with respect to loans under the credit guarantee scheme of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). With the circular issued on November 30, 2022 by CGTMSE, the credit limit for MSEs into retail and wholesale trade with guarantee cover was increased from Rs 1 crore to Rs 2 crore.
However, the retailers’ body Retailers Association of India (RAI) earlier this month had urged the government to extend all benefits available for registered MSMEs to retail traders as well in the country. In its recommendations for the union budget 2023-24, RAI said a special focus on the retail sector is important for the long-term revival of the economy and suggested that the budget must prioritize growth-oriented measures to stimulate demand and consumption through supportive policies, simplified regulations, skill development and simple goods and services tax (GST) norms.
Also read: Budget 2023: Extend all MSME benefits to retail traders as well, retailers’ body RAI suggests govt
“Benefits like subsidy on patent registration, tax exemption, protection against delayed payments, electricity bill concessions, reimbursement of ISO certification (cost), marketing and promotion assistance from the government, technology upgradation support to name a few are not available to traders,” Kumar Rajagopalan, Chief Executive Officer, RAI had told FE Aspire.
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