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