[‘Daily News Updates’ will provide you with a simplified understanding of the important economic/financial events across the country]
Retail and Wholesale Trade included with the definition of MSMEs
Minister of MSMEs, Nitin Gadkari, announced the Government’s decision to reinstate retail and wholesale traders under the definition of Micro, Small and Medium Enterprises (MSMEs), four years after they were excluded from the category. These traders can now register on the UDYAM Registration Portal. ‘About 2.5 crore wholesale and retail trades are expected to benefit from the government’s decision to reinstate them as MSMEs.’
[What are MSMEs? The MSME Act, 2006 had defined an MSME in terms of ‘manufacturing or services.’ Thus, traders were brought outside its ambit in 2017, as they are neither manufacturers nor service providers. The Government had also changed the definition of MSMEs last year. “Earlier, the MSMEs were defined on the basis of investments done; now the revised definitions will also include the turnover of the company. Moreover, the threshold for investment has been increased. The distinction between the manufacturing and services sectors has also been done away with. It will provide an incentive for MSMEs to scale up without worrying about losing the benefit of MSME once they increase in size”].
The most significant benefit which the traders can now avail is Priority Sector Lending (PSL). As per RBI Guidelines, ‘commercial banks should extend 40 percent of the total lending towards the priority sector’ while the threshold is 75% for regional rural banks and small finance banks. Along with MSMEs, loans given to agriculture also fall under the PSL. Further, registration on the UDYAM Portal will allow them to take advantage of interest rate subsidies on loans, direct tax exemptions, electricity bill concessions, etc.
India’s Exports rise by 47% to $32.46 Billion in June
In June 2021, India’s exports rose by 47.34% to $32.46 billion compared to $22 Billion in June 2020. The growth is driven by sectors such as “engineering, gems and jewellery, and petroleum products.” At the same time, however, imports grew by 96.33% to $41.86 billion in June 2021 compared to $21.32 billion in June 2020. Thus, India was a net exporter in June 2020 and a net importer now. In other words, we have a trade deficit of $9.4 billion.
[Read– BALANCE OF PAYMENT (BOP), CURRENT ACCOUNT & CAPITAL ACCOUNT EXPLAINED. “Export involves receipt of payment and is a positive entry (credit). Import is a negative entry (debit). Net export of goods is also known as the balance of trade. [If export receipts are greater than import payments, it is known as trade surplus. If export receipts are lesser than import payments, it is known as trade deficit”].
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