Ease of Doing Business for MSMEs: Nearly a week soon after the government announced reinstating retail and wholesale trades below MSME classification, the central bank Reserve Bank of India (RBI) has now written to banks to consist of the two for priority sector lending. RBI also informed all banks that such corporations engaged in retail and wholesale trade would be permitted to register on the MSME registration portal – Udyam Registration, as announced by the government.
Those operating in retail and wholesale trade and repair of motor autos and motorcycles with NIC code 45, Wholesale trade except of motor autos and motorcycles with NIC code 46, and Retail trade except of motor autos and motorcycles with NIC code 47 would be permitted to advantage below the revised guideline, according to the RBI circular sent on Wednesday. “The Enterprises having Udyog Aadhaar Memorandum (UAM) under above three NIC Codes are now allowed to migrate to Udyam Registration Portal or file Udyam Registration afresh,” the circular study.
Udyam Registration, launched in July last year, is a self-declaration paperless and no cost-of-expense portal platform for new and current MSMEs to register with their Aadhaar quantity. Moreover, the portal automatically pulls PAN and GST-linked facts on investment in the business enterprise, according to Udyam Registration due to the fact it is integrated with Income Tax and GSTIN systems. MSMEs are offered a permanent registration quantity and a certificate post-registration. The certificate bears a QR Code from which the facts about the enterprise can be accessed.
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According to the out there government information, 35.80 lakh MSMEs have been registered on the Udyam portal as of July 8, 2021. As per the MSME Ministry annual report 2020-21, there have been 1.02 crores Udyog Aadhaar Memorandum (UAM)-registered MSMEs amongst September 2015 and June 2020 apart from almost 22 lakh units registered below Entrepreneur Memorandum II amongst 2007 and 2015. UAM and EM II have been replaced by Udyam Registration last year.
However, MSME associations have expressed concern more than the inclusion of retail and wholesale trades. For instance, MSME body FISME had stated traders will now import and provide to the government and would be capable to leverage promotional schemes such as International cooperation which have been meant to market India-made goods in international markets. Essentially, the concern has been about expanding the currently vast MSME sector by like traders and consequently narrowing down the share of added benefits that otherwise have been earlier spread to MSMEs only.
“This landmark decision will have a structural impact for the sector, helping it get formalised by giving better finance options for businesses that want to get structured. It will give retail MSMEs the support they need to survive, revive and thrive,” Kumar Rajagopalan, CEO, Retailers Association of India had stated, in contrast to MSME associations’ view.