UNCUT DIAMONDS

MSMEs will have to rev up big-time for India to fulfil its growth ambitions in the next 25 years 

- BY RAJAT MISHRA

A CLUSTER OF MICRO, small and medium enterprises (MSMEs) dot the periphery of Yamuna Nagar, a small district in Haryana. In the narrow bylanes of the eponymous town is located Microtech Industries-an electrical panel manufacturer. It is 5 pm. Perched on a chair in a small cubicle, the company's owner, Sachidanand Mishra, makes a pensive point: "Business is not good, but at least it is better than what we have seen in 2020, 2021... All I can say is that we are clawing back to normalcy." Sanjay Kumar, the owner of another MSME unit, Pharmchem, concurs with Mishra: "We managed to sail through the worst phase of life-at least for businesses-but now a glimmer of hope is visible." The MSME sector comprises nearly 63 million enterprises, which contribute 30 per cent to India's GDP, 45 per cent to manufacturing, 40 per cent to exports, and provides employment to over 113 mildata. As lion people, per government Mishra and Kumar testify, the sector has put up with several shocks in recent times. Demonetisation came first, followed by GST implementation that took time to settle down, which was then followed by the downturn in the economy, Covid-19 and, most recently, geopolitical tensions such as the Russia-Ukraine war. The biggest hit came from the pandemic. According to government data, more than 5,907 MSME units shut shop during the time. "The sector faced challenges related to financial liquidity, debt repayments, meeting fixed expenses like wages and salaries, statutory dues, etc. In addition, raw material prices also went up manifold, which led to an increase in the cost of production, thereby impacting cash flows," says Mohit Jain, Chair, MSME Committee, PHD Chamber of Commerce and Industry (PHDCCI).