‘Covid impact: 67% MSMEs temporarily shut in FY21, over half lost 25% revenue’

Two-thirds of Micro, Small and Medium Enterprises (67 per cent) in India had been briefly shut for 3 months or extra in FY21 and over half of all MSMEs noticed a decline of over 25 per cent in revenues, in line with a survey of 1,029 enterprises by Small Industries Development Bank of India (SIDBI).
The survey report was tabled in Parliament by MSME Minister Narayan Rane. The MSME Ministry had assigned the survey to SIDBI in September as a part of efforts to evaluate the financial impression of the pandemic on MSMEs and the impact of the change in classifications. The Centre had, in June 2020, as a part of its Covid reduction bundle, revised thresholds for the classification of MSMEs upwards. Under the brand new classification, manufacturing and providers items with funding of as much as Rs 1 crore and turnover of as much as Rs 5 crore are categorized as micro companies, companies with funding of as much as Rs 10 crore and turnover of as much as Rs 50 crore are categorized as small enterprises whereas items with funding of as much as Rs 50 crore and turnover of as much as Rs 250 crore are categorized as medium enterprises.
About 66 p.c of respondents within the survey reported a decline in profitability on account of steady mounted prices and decline in income throughout FY2021 fiscal in line with the reply tabled in parliament by Rane. About 65 p.c of the MSMEs surveyed, availed credit score underneath the federal government’s Emergency Credit Line Guarantee Scheme (ECLGS) which supplied banks and monetary establishments a one hundred pc assure in opposition to any losses suffered by them on account of non-repayment of the ECLGS loans by debtors. At the top of 2021 the federal government had issued ensures on loans of Rs 2.88 lakh crore underneath the ECLGS.

The research additionally discovered that about 36 per cent of MSMEs surveyed had additionally availed loans underneath the Credit Guarantee Fund belief for Micro and Small Enterprises scheme throughout FY2021.
An on-line research by the National Small Industries Corporation had discovered that liquidity points, contemporary orders, availability of labour, logistics points and availability of uncooked supplies had been the issues most cited by MSMEs in the course of the pandemic.