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Last updated: 21 Dec, 2021  

Covid.9.thmb.jpg Health of MSME sector

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Bikky Khosla | 21 Dec, 2021

How has the pandemic impacted our MSMEs? The issue was raised last week on the floor of the Parliament, citing findings of a NSIC survey, according to which 91 percent of MSMES were functional and 9 percent of MSMES had closed down due to the impact of COVID-19. Interestingly, we raised this issue in August this year, stressing the urgency of extending a helping handing to the sector.

There is not an iota of doubt that Covid-19 hit the MSME sector hard, and the findings of the NSIC survey shed light on some key challenges rising due to the pandemic, including issues related to liquidity, fresh orders, labour, logistics and availability of raw material. But the survey covered only around 5,774 MSMES, and therefore a far more comprehensive study is required, rather than a political hullabaloo, in this regard.

Meanwhile, a more recent study, conducted by ILO, covering 1525 MSME unit-owners and 3111 workers in three states -- Maharashtra, Tamil Nadu, and Uttar Pradesh—found that during the survey in October 2020, 63 percent of the enterprises were still facing the impact of the lockdown, only about 40 percent of the surveyed enterprises had accessed some government support, and 45 percent of the enterprises laid off workers either temporarily or permanently.

These findings again bring to the forth the massive challenges facing the MSME sector, but one must not forget that Covid-19 is an unprecedented health crisis we have never experienced before, and, as a result of fighting against it—successfully-- the economy has also suffered like never before. Now it requires some time to mend the economy and its sectors, including MSMEs, and we will for sure rise to this challenge again, if the government continues its efforts tirelessly.

I invite your opinions.

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