The NBFC body urges Nitin Gatkari to include the traders in the MSME Definition
Till 2017, as stated by FIDC, retail and wholesale trade were included in the definition of SERVICES under the MSME definition until an office memorandum was issued that stated them to be excluded from the retail and wholesale trade from the MSME definition. Finance and Development Council (FIDC) is a representative body for assets and loan financing NBFCs catering to MSMEs, FIDC has urged the minister of MSME, Mr Nitin Gatkari to include retail and wholesale trade in the list of activities allowed for registration as MSME.
The suggestion was a part of the representation done earlier this week by the industry body before the minister to boost credit flow to MSMEs along with a letter that reiterated the requests that were sent on Saturday to the minister. In June 2020, RBI aligned its definition for MSMEs in accordance with minister Gadkari that rendered all retail and wholesale trade loans ineligible for priority sector lending and other scheme benefits. FIDC also requested minister Gadkari to extend the deadline to register on the new government registration portal Udyam Registration from April 1, 2021, to March 2022.
RBI issued a circular to its registered entities making Udyam Registration a mandatory document for the MSME classification with effect from April 1, 2021, following the MSME ministry’s notification as in June 2020. This extension would be a help to COVID-hit MSMEs who otherwise “ would be deprived of various Government scheme benefits and the resulting revival of the economy.”