SMEs/MSMEs reforms needed to uplift the economic slowdown   

India's unemployment rate hit 26% and 14 crore people lost employment as per CMIE data released recently. This is the single largest blow to the economy, thanks to prolonged lockdown in the wake of COVID-19 outbreak, and greatest and gravest threat to the demographic dividend that is (was) the strongest point. Against this background, if any sector can help mitigate it to a great extent, it is the Micro, Small and Medium Enterprises (MSME) along with the agriculture sector.

In context to the same, Sandip Chhettri, COO, TradeIndia says, "MSMEs contribute to 29 percent of GDP in the country and employs over 12 crore people. MSME businesses are usually a month-to-month operation, with little reserves for the future. A disruption like this might just mean restarting everything. The biggest worry is, of course, a liquidity crunch, followed by a disrupted supply chain, labour availability, and regulatory issues that have affected the MSME sector.”

“Government must look at providing loans to cover wages, suspension of contributions to employee’s provident fund and Employee State Insurance Corporation (ESIC) for six months. And must clawback of GST that has already been paid.  They also much look at creating liquidity by clearing dues from government departments, public sector undertakings, GST refunds and fast-track the process of tax refunds MSME must be given easier access to bank loans, especially at low rates, with help from the state and central governments," he further added.