COVID-19 impact on MSMEs
Part of: GS Mains III – Indian Economy and issues related to it; Growth and Development
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
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- Closure of MSMEs could create a serious employment problem, which could further lead into a social crisis.
- 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.