Bank Credit to Retail and Wholesale Trade Jumped 16% in Nov ‘22

Gross bank credit deployed to the retail and wholesale trade in India in November 2022 has seen a significant increase of 16% YoY, reaching INR 7.33 lakh crore, according to data from the Reserve Bank of India (RBI). This is a significant jump from the 10.2% YoY growth seen in November 2021, when the figure stood at INR 6.32 lakh crore. Among wholesale and retail trade, which were brought under the Micro, Small and Medium Enterprises (MSME) category in July 2021, retail trade deployed was INR 3.79 lakh crore in November 2022, an increase of 21.9% from the INR 3.11 lakh crore deployed in November 2021. In comparison, INR 3.53 lakh crore was deployed to wholesale trade (other than food procurement) in November 2022, an increase of 10.3% from INR 3.20 lakh crore in November 2021.

Since being included under the MSME definition, the government has further eased credit access for retail and wholesale traders by treating them on par with other borrowers for loans under the credit guarantee scheme of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). With the circular issued on November 30, 2022, by CGTMSE, the credit limit for MSEs in retail and wholesale trade with guarantee cover has been increased from INR 1 crore to INR 2 crore.

However, the retailers’ body RAI has urged the government to extend all benefits available to registered MSMEs to retail traders in the country. In its recommendations for the union budget 2023-24, RAI has highlighted that a special focus on the retail sector is important for the long-term revival of the economy and suggested that the budget should prioritize growth-oriented measures to stimulate demand and consumption through supportive policies, simplified regulations, skill development and simple goods and services tax (GST) norms.

Source: Financial Times