MSME: Retailers seek MSME tag to get some Govt support – The Economic Times

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.

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.
NEW DELHI: 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, FM 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.

via MSME: Retailers seek MSME tag to get some Govt support – The Economic Times

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