Amid enterprise uncertainty due to the second wave of the pandemic, the majority of Covid-hit MSMEs do not anticipate any improvement in their enterprise activities more than the next six months. According to a survey by credit rating agency Care Ratings, involving 305 respondents like tiny and medium enterprises among April 27 and May 11 to gauge the influence of ongoing lockdowns on financial prospects, 54 per cent anticipated the enterprise situations to worsen more than the next six months. 34 per cent respondents anticipated no alter in the enterprise situations although only 12 per cent anticipated an improvement in enterprise activities.
Recovery of MSMEs in several sectors like retail, aviation, hospitality, and other individuals, which had been amongst the worst hit due to Covid last year, was nearing the pre-pandemic levels just before the second wave struck about post-February, and circumstances swiftly began to climb up. For instance, according to retailers’ body Retailers Association of India, month-to-month recovery of the retail sector had neared pre-Covid level for the month of February with sales touching 93 per cent through the month in comparison to February 2020. The association had anticipated a complete recovery in March. “The Retailers Association of India believes that the two most important and immediate steps that can prevent this industry from collapsing are to prioritize vaccination of the Last Mile Workers and to urgently provide financial support measures,” Kumar Rajagopalan, CEO, Retailers Association of India had mentioned in a statement on Thursday.
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According to the survey, 72 per cent felt of the MSME respondents mentioned that the restrictions would trigger labour provide shortages although 16 per cent respondents do not foresee labour shortages and 11 per cent had been unsure. Amid such challenges, it was apparent that the majority (84 per cent) respondents believed that Covid resurgence has escalated enterprise uncertainty. However, respondents had been just about equally divided in terms of borrowings more than the coming six months. While 41 per cent respondents mentioned that they had been not probably to borrow loans, 40 per cent responded in affirmative.
Even as MSME remains amongst the hardest-hit sectors due to lockdown restrictions, there is no official record maintained for the units shut through the lockdown by the government. “As MSMEs are there in both formal and informal sector, data regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises (MSME),” MSME Minister Nitin Gadkari had mentioned in a written reply to a query in the Rajya Sabha in early February this year. Likewise, in September 2020 as effectively, MSME MoS Pratap Chandra Sarangi in a written reply to a query in the Rajya Sabha had mentioned that “no such record is available” for the quantity of MSME units shut down through the March-August 2020 period of the pandemic. In truth, there is no information with the government on the quantity of MSMEs closed down from FY15 to FY20, Sarangi had added.