Ease of Doing Business for MSMEs: The contraction in the MSME-led retail sector due to Covid in comparison to the pre-Covid situation has lowered. From minus 79 per cent development in month-to-month sales in May vis-a-vis May 2019, the scenario has enhanced as contraction narrowed down to minus 50 per cent in June in comparison to June 2019 sales efficiency, according to retail body Retailers Association of India (RAI). This implied retail sales enhanced from 21 per cent in May to 50 per cent in June of pre-Covid levels. Importantly, the sector had just about recovered to the pre-Covid situation in February as retail sales had peaked to 93 per cent of the year-ago period prior to the second Covid wave struck.
“To get this rectified, the only change this time from last year is the availability of vaccines. If vaccination drive picks up, things can recover really fast just like how it is happening in the US or the UK. But if it continues the way it is, recovery is expected to be delayed,” Kumar Rajagopalan, CEO, RAI had told TheSpuzz Online.
The benefits have been based on a month-to-month survey of a sample set of retailers by RAI. For June, 88 retailers have been surveyed. The decline in retail sales throughout the month was highest in the sports goods segment at minus 66 per cent followed by minus 64 per cent in jewellery, minus 61 per cent in footwear, minus 57 per cent in beauty, wellness, & private care, minus 52 per cent in apparel and clothes, and so forth. On the other hand, sectors nearing June 2019 level recovery have been meals and grocery with only minus 7 per cent decline and QSR with only minus 10 per cent contraction. Moreover, area-sensible, North performed far better with a minus 43 per cent decline in comparison to minus 50 per cent in West and South each and every, and minus 55 per cent in East.
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Earlier this month, retailers and wholesale traders have been reinstated below the MSME sector to advantage them below priority sector lending. The former MSME Minister Nitin Gadkari had tweeted that the move will advantage 2.5 crore retail and wholesale traders in India. Wholesale and retail traders have been carved out of the MSME sector by means of a gazette notification dated June 2017 based on the rationale that they have been neither manufacturing units nor service units and therefore, will not be in a position to obtain Udyog Aadhaar Memorandum for registration of their units.
Recently, the Reserve Bank of India (RBI) had also written to banks to involve retail and wholesale traders for priority sector lending. RBI had additional informed all banks that such enterprises engaged in retail and wholesale trade would be permitted to register on the MSME registration portal – Udyam Registration, as announced by the government. Moreover, a number of states such as West Bengal, Karnataka, Sikkim, Bihar, Punjab, Himachal, Uttar Pradesh, Delhi, and so forth., eased Covid-associated restrictions such as evening curfews, weekend curfews, restricted retail hours, and so forth. “Retail businesses continue to be stressed and are finding it difficult to sustain due to restricted timing of operations and weekend closures,” Rajagopalan mentioned on Monday.