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The clampdown on economic activities imposed due to the Covid-19 crisis has choked a vast number of businesses especially the micro, small and medium enterprises (MSMEs), possibly to the point of perpetual closure. There are an estimated 63.3 million MSMEs engaged in non-agricultural economic activities, employing 110 million people across the country. They contribute nearly 30% of India’s GDP and about 49% exports. Thus, the prudence with which the MSMEs manage themselves during this crisis with the assistance of the government will go on to play a defining role in their story of survival. The government has come up with some relief measures for the MSMEs but it needs to do a lot more in terms of providing appropriate and timely finance.
These are difficult times and require prudent planning on the part of MSMEs to manage their finances and business. Here are ways in which they can plan to tide over the pandemic:
These are difficult times but this too shall pass. Economists are forecasting a quick V-shaped recovery once the pandemic is controlled and lockdown lifted. The pandemic will force organisations to rethink supply chain giving an impetus to ‘Make in India’ which is expected to hugely benefit Indian MSMEs.
Views are personal.
The author is national credit manager for SME Lending at Clix Capital.
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