LUB has given press release strongly opposing the INCLUSION OF TRADERS INTO THE MSME SECTOR.

Ministry of MSME, of Government of India have issued one Office Memorandum on 2nd July 2021 per which Retail &

Whole sale Traders are now included & recognized as MSME. It is also mentioned in the OM that the said decision is

made in response to representations from many to include them & allow to register as MSME on the Udyam

registration portal.

It is also mentioned categorically that the “benefits Retail & Wholesale Trade MSMEs are restricted to Priority Sector

Lending only.

Laghu Udyog Bharati largest all India organization of Micro, Small Industries having presence in 400 plus districts

observes the said decision to distractive, destructive & inappropriate for Micro, Small & Medium Industries.

1. Currently, the available “Priority Sector Lending” to MSMIs is inadequate compared to the demand from the Priority

Sector. With the new provision of inclusion of retail & wholesale traders the available funds of PSL will get divided &

result into contraction of MSMI funding. This will further put MSMI into deep crisis of cash crunch.

2. In future it is very likely that the other schemes of MSME like priority procurement by PSUs will also be made

available to Traders which will distract the promotion of manufacturing sector & result into problems & difficulties.

3. With this new provision we expect contraction of manufacturing sector & increase in import, repackaging,

assembling sector & paradigm shift towards Trading sector resulting into closure of micro & small manufacturing sector

which will ultimately impact negatively on the employment causing increase in the socio-economic imbalance.

4. It is understood that to receive the obvious impact of” The Make in India, Vocal for Local & Atmanirbhar Bharat

Abhiyan” Policy programs, are targeted to expand the manufacturing sector. However, with the inclusion of Trading

into MSMEs it will impact the manufacturing negatively & will be distracted from the expected results.

5.In fact the formation of Small-Scale Industry Ministry was formed separately by Vajpayee Government in 1999 with

specific purpose to promote manufacturing small scale industry, which later on got renamed as Ministry of MSME in

2006. It is important that this Ministry to focus & restrict their activity for Micro & Small Industries & continue with the

original purpose of the formation of Ministry.

6. We acknowledge the importance of Trading Sector in the economy of the country. It is also important that they

receive promotion but not by consolidating with manufacturing sector. We submit & request that the retail & wholesale

trade be kept separated & may be merged with Commerce & Industries Ministry for specific promotional schemes & its

implementation.

7. It is important that Micro & Small Manufacturing Sector grow with good pace to deliver the inclusive & equitable

benefits of Atmanirbhar Bharat. We must give attention to the fact that 28% contribution of China in world GDP is result

of it being world’s manufacturing hub. Whereas, we have only 3% contribution in World GDP.

8. Laghu Udyog Bharati is of clear opinion that mix up & merging of Manufacturing, Trade & Services under one

department will deviate focus of promotion to Micro & Small manufacturing sector & will open inroads to internal market

for international trade.

On this background we request government to reconsider the decision of inclusion of Retail & Wholesale Trade under

MSMED Act.