More Means Less In MSME Mess

Without robust and healthy MSMEs the economic and business skeleton of the nation can come crashing down

- Aparajita Gupta

Four major crises in less than four years! From demonetisation, Goods and Services Tax (GST), economic slowdown, to COVID-19 catastrophe! The first killed many MSMEs. The second forced some to shut shop. The third led to fear and loathing. And the fourth, well, it decimated the sector. The future of more than 60 million Micro, Small, and Medium Enterprises (MSMEs) hangs by a thin thread. If the government-induced stimulus doesn’t work – the initial signs indicate that it is unlikely – the India economy is likely to go into a tailspin.

The policy makers assure us that we need to wait, as it takes a lot of effort to re-start a large economy like India after a nationwide lockdown for two months. They repeat that things have begun to move, and the positive impact will be visible in the coming months. “It’s too early to comment because many sectors resumed work only a few weeks ago,” says Anurag Thakur, Union Minister of State for Finance (See Interview on Page 26) He adds that the government took “extraordinary steps” in an “extraordinary situation.” Sadly, time is at a premium. If the straggling MSMEs are unable to recover from their precarious state of a combination of near-paralysis and comatose by September 2020, be prepared for an economic mayhem. The pandemic will turn into a pandemonium. Remember that the MSMEs account for a third of gross value added, more than 100 million jobs, and half the country’s exports.

Without them, the economic and business skeleton that India carefully constructed over the past few years can come crashing down.