Megha Sharma
Quick Summary
According to the Annual Report of the Department of MSME(2018-19), there are 6.34 crore MSMEs in the country. The MSME sector contributes around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities as well as 33.4% of Indias manufacturing output by creating employment for aro
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FAQ :
MSMEs faced declining revenues, a severe unavailability of cash due to prolonged lockdowns, and issues with loan collateral as property values decreased. Liquidity crunches were common, with revenues dropping by 20-50%.
The pandemic caused massive disruptions in supply chains due to the unavailability of public transport, which increased transportation costs. A simultaneous collapse in market demand further compounded these issues.
Yes, some MSMEs innovated by shifting production to essential commodities like sanitisers, PPE kits, and masks. Additionally, a lack of employment led some working-class individuals to start local businesses, creating new employment opportunities.
The Reserve Bank of India announced measures such as a moratorium on term loans and easier working capital financing. Some banks offered emergency credit lines, and schemes like Subordinate Debt and Fund of Funds were launched.
Key schemes include the Udyami Mitra Portal for credit accessibility, MSME Sambandh for monitoring public procurement, MSME Samadhaan for delayed payments, the Digital MSME Scheme, Prime Minister Employment Generation Programme, and SFURTI for traditional industries.
The 'way forward' suggests government tax relief (GST and corporate tax), providing liquidity to rural areas to boost demand, establishing a comprehensive MSME database, and implementing government credit guarantees to assure banks against loan defaults.
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