Retailers with annual revenue of less than Rs 100 crore, comprising more than 80% of India’s overall organised retailers, have urged the government to classify them as MSME (micro, small and medium enterprises) so that they can also take advantage of the Covid-19 stimulus packages.
Last week, finance minister Nirmala Sitharaman spelled out a raft of measures to help the ailing MSMEs, including collateral-free loans up to Rs 3 lakh crore backed by government guarantee, repayment of dues within next 45 days and change in definition of these businesses.
MSME borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnovers will be eligible for the emergency credit line to their businesses under the package with loans having a four-year tenor with moratorium of 12 months on the principal repayment.
However, retailers with around Rs 100 crore of revenue will not be able to avail themselves of the loans as they are not classified as MSMEs.
Many retailers across the country, from optical chains to large franchisee operators of global brands and standalone local business with less than Rs 100 crore of sales, have said they should also stand to benefit from the stimulus packages for the medium sized enterprises.
“MSME has a very vague definition and they have to be either a manufacturer or into other services and they say retailers are not part of services,” said Akshay Jain, managing partner at Greenways, which operates four saree outlets. “We are into services and retail is a service.”
Similarly, Balujas, which operates around nine footwear stores in Delhi-National Capital Region with annual revenue of Rs 12 crore, does not qualify for the MSME benefits. Vidhur Mehta, managing partner, Balujas, said business is going to be tougher in the coming months and without a bailout his company would have to “scale down” operations including shutting stores. “Since we are retailer we don’t get categorised under MSME,” said Mehta.
The Retailers Association of India (RAI), the largest industry body of more than 13,000 organised retailers operating more than 500,000 outlets, has written to the MSME ministry requesting it to include smaller retailers into the MSME fold.
“Retailing doesn’t come under the priority sector,” the RAI wrote to MSME minister Nitin Gadkari last week. “Therefore, if a person is merely running a departmental store or a retail shop and retailing in products, not manufactured by him, he cannot obtain MSME registration.”
The association highlighted that retail is around $900 billion annual business in India and about 86% of the business or $734 billion is controlled by MSMEs and unorganised retailers.
Two days prior to that, Gadkari had said in a videoconference with RAI members that the ministry had “examined expeditiously” the case of clubbing smaller retailers into the MSME fold.
- Fabrics & Processing2022.01.15THE WORLD’S LARGEST KHADI NATIONAL FLAG WILL BE PRESENTED IN JAISALMER WHICH IS 225 FEET LONG, 150 FEET WIDE AND 1400KG
- Articles2021.12.28INDIA’S EXPORTS OF TECHNICAL TEXTILES WITNESSED A HIKE
- Articles2021.12.28TECHTEXTIL INDIA 2021: FOREIGN INVESTMENT OPPORTUNITIES IN TAMIL NADU
- News & Insights2021.12.22PICANOL LAUNCHES NEW “CONNECT” GENERATION AIRJET & RAPIER WEAVING MACHINES