All India Manufacturers Organization (AIMO), an apex trade body focusing on the welfare and prosperity of MSME sectors conducted a survey. The study has shown that around 35% of the MSMEs and 37% of independent businesses are in the process of winding up and ceasing their operation, as they see no grounds of recovery from the COVID outbreak. The remaining 32% of the MSMEs said that recovery would take around 6 months, while only 12% expects it in three months. The report further states that 11% of respondents consist of an undecided category in the MSME segment, whether to continue or not as the uncertainty persists.
The most astonishing aspect was that 35% of MSMEs and 41% of the self-employed respondents felt that they see no chance of recovery in their business and have begun ceasing down their operations. India is home to more than 65 million MSMEs, engaging over and above 150 million people and has over 130 million people being self-employed. Start-ups account for over 19% of the MSMEs in the country. Anand Prakash, founder of a Bengaluru based tech startup says, “The financial stimulus aid provided by the Government does not apply to MSMEs in the Start-Up sector. Many firms have already issued the termination letters to employees and have begun the process of winding down. Although they believed in their business model and have procured the best talent, currently they do not have the financial viability and also notes that it will be difficult for employees to get jobs in the current scenario, but is left with no choice. The Gig Economy is expected to face challenges for the next 6 months.”
Although the Government of India announced several stimulus packages hoping to revive the economy, small businesses seem to have not benefitted. This is just the first of the three parts of the survey announced by AIMO. This survey was conducted by AIMO in association with Digitally4Empowerment (D4E) a social tech enterprise and several trade bodies such as Federation of Indian Industry (FII), Association of Indian Industry (AII), Central Manufacturers Welfare Association (CWEI), and Federation of Indian Women Entrepreneurs (FIWE).
The COVID19 induced series of lockdowns has affected the economy and businesses, with the MSME sector hit hard. An ex-president of AIMO, EK Raghunathan says that they appreciate and thank the FM and PM for bringing the needs of MSME’s in the limelight, on speaking to members of various MSME associations and Industrialists across the country, they are unanimous in their opinion that the benefits of financial packages announced by the FM have still not reached the doorsteps of the MSME.
