Ease of Doing Business for MSMEs: 73 per cent of Indian modest and medium enterprises (SMEs) couldn’t make a profit through the last monetary year (FY21) whilst only 13 per cent broke even amid Covid effect, a survey by Consortium of Indian Associations (CIA), which represents many trade associations in India, mentioned on Thursday. SMEs in most of the sectors such as retail, travel and hospitality, aviation, automobile, actual estate, and so forth., had been crippled through the very first wave of the pandemic last year and the second wave this year. The survey, which covered more than 81,000 self-employed men and women and SMEs in India via 40 companion SME associations of CIA earlier this month, also noted that 80 per cent entrepreneurs had been insecure “about their future, with the double whammy of the pandemic crisis & economic implosion coupled with the lack of any support base.”
“Last year, the government performed surgery on MSMEs without any sedation. This time there should be sedation of moratorium, capital support to MSMEs who have lost revenue, postponing all payment collection like GST, PF, ESI, etc., by six months so that whatever money MSMEs have can be used for this emergency situation,” K.E. Raghunathan, Convenor, CIA and former National President, All India Manufacturers’ Organization told TheSpuzz Online.
Multiple surveys have been carried out by associations, trade bodies, and corporates more than the previous monetary year to underscore the effect of the pandemic on modest organizations and recommend measures to accelerate their recovery. While the government and the Reserve Bank of India announced measures to cushion Covid distress, the assistance had seemingly fallen brief to assist revive MSMEs as indicated by the survey.
Want to know which technologies suits greatest for your modest small business? Register for our webinar on leveraging technologies for SMEs
Among other essential findings of the CIA survey integrated, 82 per cent respondents felt that the central and state governments weren’t searching just after their interests, 42 per cent had been unable to make a decision on retention of workers, 59 per cent decreased their employees or sacked or removed them in comparison to the pre-Covid period, 88 per cent had been but to avail any of the stimulus packages introduced by the government amid Covid. The respondents integrated 49 per cent producers, 15 per cent service providers, and 14 per cent self-employed, consultants, startups, traders, and so forth.
To boost the recovery of SMEs, the survey recommended the government to very first, exempt SMEs from statutory compliances, penal actions, and litigation second, guard them from the higher-interest burden, value wars, higher price of raw components, losing workers, penalties, and late costs and third, assistance them by providing liberal loans, clearing off the pending dues, supplying moratorium with interest waiver, and not declaring NPAs for a year. CIA also proposed the government to amend the Micro, Small and Medium Enterprises Development Act, 2006, to strengthen the state facilitation councils.
“Micro Small Enterprises Facilitation Centers should be given more power to conduct their proceedings in a transparent and time-bound manner and enforce payment of the specified interest to the aggrieved MSMEs. The government also needs to make changes in the GST Act to make it SMB friendly,” recommended Ravi Sood, General Secretary, Badli Industrial Estate Association.