Ease of Doing Business for MSMEs: In a longstanding demand from retail and trade market associations, Minister of MSME Nitin Gadkari last week reinstated the status of retailers and wholesale traders as MSMEs.
With the revised suggestions the retail and wholesale trades will now be in a position to register on the Udyam Registration Portal.
While the move has been hailed by traders and retailers associations, quite a few standard MSME associations have expressed their concern about the MSME definition’s expansion.
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The Office Memorandum issued by the Ministry of MSMEs dated 2nd July 2021 stated that the ‘benefit of registration will be restricted to Priority Sector Lending’.
Industry Associations such as Federation of Indian Micro, Small and Medium Enterprises (FISME) have raised the concern about achievable misuse of registration in other activities also.
In its statement, FISME stated that traders will now be covered beneath the government’s public procurement policy. It is at the moment mandatory for central ministry, government departments, and PSUs to earmark 25 per cent of their annual procurement from the MSE sector to increase manufacturing in the nation. The concern is that now traders will import and provide to the government. Also, traders will now be in a position to leverage promotional schemes such as International cooperation which have been meant to market India-made goods in international markets. “If appropriate checks are not brought in, it can be counterproductive to the government’s Make in India initiative,” Anil Bharadwaj, Secretary General, FISME, told TheSpuzz Online.
Vinod Kumar, President, India SME Forum stated that whilst this is a step forward exactly where the government is assisting in reviving a sector, it is also encouraging persons to grow to be traders. “The government has acknowledged the need to boost entrepreneurship in the country to create jobs but to encourage manufacturing there is also a need to give them that privileged distinction through schemes and a differentiation in its status rather than including it in the same set as traders.”
In an earlier interview with TheSpuzz Online, Consortium of Indian Associations Convenor K E Raghunathan had stated that the move will dilute the MSME sector that is currently very vast. He explained that very good top quality MSME information is absent in the nation, and which includes more than 2.5 crore traders and retailers will additional complicate the concern. “It will be much more difficult to map data points around MSMEs in each district or state, making it difficult to analyse the problems to introduce the right provisions at the right time,” Raghunathan added. Moreover, current help to MSMEs such as Government eMarketplace (GeM) portal, priority sector lending, and payment outstanding redressal by state facilitation centers will be weakened with such massive additions, he concluded.