Despite the fact that the government was quick to adopt programmes like the Mudra Yojana loans, which required no collateral and allowed people to borrow up to Rs. 50 lakhs, Jayendra Tanna, President of Ahmedabad Chamber of Commerce Welfare Foundation and President of All India Vyapar Mandal New Delhi maintains that the National Trade Policy is still being implemented. Since 2011, they have been offering recommendations, but they have had little impact.
The industry contributes about 45-50 percent of GDP and employs 65-70 percent of the workforce. The unorganised sector is losing money because they are unable to contact banks for loans, and banks are unable to cooperate since they require 4-5 years of bank statements, discouraging new traders. We were advised that we were included in MSME post the launch of Mudra Yojana and recently the Government included MSME retail and wholesale trade into the fold of MSME. However, we are ignorant of the benefits that will accrue to the sector.
He maintains that bankers are unhelpful, seeking for ways to excuse their refusal to approve unsecured loans. Unsecured loans worth Rs. 2 crores were announced; however bankers have reduced the amount to Rs. 50 lakhs. The government should appoint a committee or a monitoring session to oversee implementation, with members of the retail trade community included, and ask lenders for frequent updates on how many people applied, how many were denied, and why they were denied? Edited Excerpts:
Q What is the impact of the recent changes in MSME definition you expect to see?
It’s a positive step; the previous definition made it impossible for people to enter the sector. Non-trading communities would also be considered; previously, capital investment was the primary criterion, but that has been altered to rupee investment, which can provide more mileage and chances.
Q. What are some of the critical challenges your members are facing?
It’s a disaster after a pandemic, especially for the trading community. Those who aren’t in essential businesses are the ones who suffer the most. The entire social system has shifted. People’s priorities have shifted. People have been surviving solely on their savings for the past two years. Traders in Gujarat sold a large amount of ancestral wealth for survival and many withdrew from the Provident Fund account too. The monthly outflow is constrained, and people are only purchasing necessities. The purchasing capacity has altered, and retailers, such as clothing, shoes, non-essential items, and kitchen equipment, have suffered as a result. According to our estimates, 35-40% of people have switched from non-essentials to essentials in their businesses. Another issue is that more than 14 crores of money could not be recovered from the market; money is trapped, turnover has decreased, and investments have decreased, all of which were eventually recovered by the government’s formation of a special committee. The retail and wholesale industries have taken a beating. Shoes and clothing, for example, remain unsold. All of the festivities are subdued. The traders, on the other hand, are a middle-class sector that does not protest because they want to preserve their prestige as majority of their businesses are generations old. Traders treat their employees as if they were family, as they had been with them for more than 20 years. The majority of the workers are unskilled. Millions of people have lost their jobs, resulting in the failure of the business community.
Q, What role can Indian Technical Institutes (ITI) or polytechnic play here?
ITI offers basic 5-7 job-oriented courses; they should include simple courses such as arithmetic, logistics, catering, and accounting-blue colour employable abilities; there should be no admissions criterion; and skill-oriented courses should be conducted. These are also mental skills that these individuals can master. Even helping hand in shops require employability skills to earn a good job, apart from courses for shopkeepers. They are from small communities and would have only completed the 10th grade; but, if they enrol in an ITI programme, they will be able to get a head start.
Q. What broad measures you think can help your members concerns, considering the Covid impact has also created a pressure in governments fiscal position?
Consumer attitudes have shifted, and we will conduct consumer melas and exhibitions to encourage consumers to spend money on non-essential items. We’re creating an Ahmedabad shopping festival in September where we will give even handicrafts women from rural areas exposure to market their items in the United States. Ideas that are out of the box and encourage consumers to spend. Last year, we organised the Ahmedabad Shopping Festival and asked the government to share the costs. For every Rs 500 purchase, the government provided a voucher. We need to persuade people to come shop with us. It takes a team effort. It is necessary to generate demand. The government levies taxes on everything, but they should be user-friendly and tailored to the individual. Even if we are not operating business, we must pay taxes on the property we own. Because minimum charges are assessed for any business, regardless of sales, the government has become a partner in our business.
Q Why do you believe the government should only provide support? Isn’t it possible for the traders to be self-sufficient?
We have not sought any assistance from the government at this moment when we are arranging the Ahmedabad Mela to export their products to the United States. We’re asking merchants to reduce their profit margins and look for new ways to expand their firms.
Q. How are banks/NBFCs supporting? Did you all get the benefits of government schemes under Covid measures taken by the government?
We are a middle class citizen, Whatever Government did it for below poverty lines citizens by offering free or subsidised ration but nothing for traders like us. The retail wholesale trade have been doing it on our own, today with the introduction of the whole retail and trade community in MSME the actions taken by Government are not in sync with their words. This new classification does not indicate us as an MSME in every way. The industrial sector receives numerous perks, including 50 percent subsidies from the Gujarat Industrial Development Corporation (GIDC), a reduction in stamp duty, electricity waivers for a few years, and tax incentives that we do not receive. Currently, only financial assistance is provided; we must be given equal weight. For example, if someone wants to open a petrol pump, they must purchase real estate from open market and operate it from his own pocket.
Q. How’re you’ll preparing for future uncertainties if third wave happens?.
There is no retail trade, no future projects, no investments; they are all waiting for the old stocks to be liquidated; if the third wave arrives, it will be a calamity waiting to happen. People have realised that their ability to conduct business has decreased, and as a result, they are lowering their outgoings. We’ll confront it and cross over as well. We are recommending individuals to be vaccinated, even their office employees, because vaccination is the only option that we can see besides supporting one another.
Q. The retail space is booming with large internet giants from Amazon to Jio to Flipkart, all are eyeing the big pie. What is your take on it?
We are not opposed to them, nor can we reject them; technology has already arrived, and we must begin and continue to use it. We oppose exploitative pricing and encourage merchants to embrace technology by putting their operations online. If we protest, we are merely depriving traders of their most fundamental needs. With even the tiniest dealers now using UPI, a lot of technological changes have occurred. There is no need to go to the bank every day, which saves time and energy. The systems for financial transactions have evolved. People have also realised the importance of neighbourhood stores since, when the covid-wave first began, these merchants backed us up. Apart from stocking the essentials, grocery stores have started storing basic household items too.
Q. Any message that you wish to give to Government?
We are an important part of your economy’s machinery; please do not ignore us; we will survive. we respect you because of the law, and we are all law-abiding citizens; we want our pride to endure, therefore we make no demands. We’re only looking for basic assistance.