35% MSMEs Have Begun Shutting Shop Due to COVID-19 Situation: Survey
Image Courtesy: Retail4growth.com
New Delhi: As much as 35% of micro, small, medium enterprises (MSME) and 37% of self- employed entrepreneurs have begun shutting their businesses seeing no chance of recovery amid the COVID-19 outbreak and over two months of lockdown measures, says a survey by All India Manufacturers Association (AIMO).
The survey was conducted online between May 24 and May 30 in which a total of 46,425 self-employed individuals, MSME owners, corporate employers and employees participated. Notably, the survey was conducted after the Central government announced a Rs 20 lakh crore financial package termed ‘Atmanirbhar Bharat’ package.
“Uncertainty of continuing business, rather undecided category of respondents, is about 11% in MSME category and about 17% in Self Employment category. They still have scope to recover,” said the survey.
On May 13, while announcing the financial package, finance minister Nirmala Sitharaman had stated that the definition of MSMEs would be expanded to reclassify small and medium enterprises. Under the package, about Rs 3.5 lakh crore were extended to the MSME sector as a loan from banks and other financial institutions.
Among other findings of the survey, 32% of MSMEs and 26% corporates stated that they would require six months to recover from the COVID-19 impact. Whereas, 46% of corporates and 27% of self-employed stated that they may recover within three months.
“Among the corporate respondents, who indicated that business was affected, 46% felt it may take three months to recover while 26% felt they will bounce back by the end of the year, a six months period. This sector will not see many closures but will see many people losing jobs, scale down of operation’s, focus on core business and a fine financial balancing act.” Kenny Ramanand, honorary general secretary of AIMO, said in a release.
The MSME sector is the largest employer in the country after agriculture.
Among the non-affected businesses are essential service providers during COVID-19 situation, adds the survey.
K E Raghunathan, former president of AIMO, told Newsclick that AIMO was working on the collected data and more results on the situation would be released this week.
“AIMO showcases the heartbeat of MSMEs in India. While we appreciate and thank the Finance Minister and Prime Minister for bringing the needs of MSMEs in the limelight, on speaking to our members of various MSME associations and industrialists across India, they are unanimous in their opinion that the benefits of financial packages announced by the FM has still not reached the doorsteps of the MSMEs and also inadequate to meet the impact of COVID over business in the last three months of non- operation,” said Raghunathan.
AIMO claimed the survey was the largest ever industry survey in association with digitally for empowerment (D4E), a social tech enterprise and other trade bodies including Federation of India Industry, Association of Indian Industry, Cement Manufacturers Welfare Association, Consortium of Women Entrepreneurs of India, Federation of Indian Women Entrepreneurs, First World Community, Chamber of Small Industry Association, Federation of Small and medium Industries and Amausi Industries Association, Lucknow.
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