Bad to worse
Indian MSMEs are struggling to restart the operations
Impact on MSME
Indian MSMEs are struggling to restart the operations
Unlock hasn’t helped micro, small and medium enterprises (MSMEs), as there is lack of demand. There are more than 63 million MSMEs in India.
National Small Industries Corporation (NSIC) interviewed 6000 MSMEs in June, July and August. 9 out of 10 MSMEs started have started operating as on August1. Only 1 out of 4 were utilising 50% of their capacity. Other than demand lack of liquidity and logistics are causing the low utilisation. Only 6% of MSMEs have received the emergency credit from the government and banks.
Roshan Kishore, journalist with Hindustan Times writes, “Only one in four of India’s Micro, Small and Medium Enterprises (MSMEs), which produce almost 30% of the country’s GDP and employ almost one fourth of the work force, were using even half of their installed capacity on August 1.”
Small businesses were already unable to get formal financing. They also have to bear the burden of delayed payments. About 20% of MSMEs haven’t received their dues from the government’s department. Indian government should also provide more backend services such as subsidised technology and research and development. It will help them compete with the bigger players.