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COVID-19 impact on MSMEs

  • IASbaba
  • August 17, 2020
  • 0
UPSC Articles
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COVID-19 impact on MSMEs

Part of: GS Mains III – Indian Economy and issues related to it; Growth and Development

About:

According to a report from a group of experts on the post-COVID-19 economic and industrial revival –

  • Around 20-40% MSMEs facing closure
  • Smaller units in the MSME sector suffered from the effects of demonetisation in 2016 and also from the introduction of GST in 2017
  • MSMEs have been hit again by the three-month lockdown and due to the uncertainty about the pace of recovery 

Do you know?

  • Closure of MSMEs could create a serious employment problem, which could further lead into a social crisis.

Measures:

  • National report for MSMEs by Global Alliance for Mass Entrepreneurship (GAME) outlines a three-stage approach consisting of ‘survive, revive and thrive’
  • Survival is the first priority and the aim should be to ensure that large numbers of MSMEs are not immediately wiped out.
  • However, those that survive will need to be helped to revive as the economy gets back to normal.
  • There is a need to address the long-term objective of how MSMEs can actually thrive and support a faster growth rate for industry.

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