Industrial associations worry about including traders in the MSME sector

Aurangabad, July 8:

The central government reinstated the status of retailers and wholesale traders as Micro Small and Medium Enterprise (MSME) last week. With the revised guidelines the traders will now be able to get bank loans and register on the Udyam registration portal. But several industrial associations have expressed their concern about the expansion stating it may have an counterproductive effect on Make in India initiative and might lead to misuse of registration in other activities.

Speaking to this newspaper, a member of the Marathwada Association of Small Scale Industries and Agriculture (MASSIA) on the condition of anonymity said that 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 MSME. The concern is that now traders will import and supply to the government. Also, traders will now be able to leverage promotional schemes that are meant to promote India-made goods in international markets. Traders will now be covered under the government’s public procurement policy. It is currently mandatory for central ministry, government department to earmark 25 per cent of their annual procurement from the SME sector to boost manufacturing in the country. If appropriate checks are not brought in, it can be counterproductive to the Make in India initiative and other schemes.

Facilitate lending, upgrade facilities

A member of the Chamber of Marathwada Industries and Agriculture (CMIA) said instead of giving MSME status to traders, the government facilitates lending, upgrading facilities and upgrading support to the trading community. Addition of nearly crores of traders in the MSME sector will further complicate the issue. It will also be difficult to identify the sector specific problems further complicating the issue.