The Indian growth story is significantly contributed by the MSME sector of India, stimulating entrepreneurship and the base for the largest employment opportunities. MSME sector also contributes to the Export sector. As per the information received from Directorate General of Commercial Intelligence and Statistics (DGCIS) the Share of MSME related Products in total Export from India during 2018-19 is 48.10%. As per PIB report, Under the Prime Minister’s Employment Generation Programme (PMEGP,) the estimated employment generated (number of persons) in micro enterprises during the years 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 are 3.58 lakhs, 3.23 lakhs, 4.08 lakhs, 3.87 lakhs and 5.87 lakhs, respectively.
In the wake of the corona virus pandemic, the Indian Government has imposed a 40 day lockdown period in an effort to contain the spread of COVID-19. Amidst this lockdown, the MSME sector particularly the Micro segment of the MSME sector is facing the brunt. Business closures and loss of employment has been a kick in the teeth for both the employers and the workers/employees.
The MSMEs have a wide spectrum producing a range of products and services to cater the needs of both domestic and global markets.
As per the National Sample Survey (NSS) 73rd round, conducted by National Sample Survey Office, Ministry of Statistics & Programme Implementation during the period 2015-16, there were 633.88 lakh unincorporated nonagriculture MSMEs in the country engaged in different economic activities.
31% MSMEs were found to be engaged in Manufacturing activities, while 36% were in Trade and 33% in Other Services. Again out of 633.88 estimated number of MSMEs, 324.88 lakh MSMEs (51.25%) were in rural area and 309 lakh MSMEs (48.75%) were in the urban areas.
The Micro sector with 630.52 lakh estimated enterprises accounts for more than 99% of total estimated number of MSMEs. Small sector with 3.31 lakh and Medium sector with 0.05 lakh estimated MSMEs accounts for 0.52 % and 0.01 % of total estimated MSMEs, respectively.
The above mentioned figures say for themselves how important it is the revival of the MSME sector of India in the middle of and post Corona Virus pandemic.
The United States has announced a $2 Trillion package for the economic revival out of which $ 150 Bn has been specifically allocated for the “severely distressed businesses”.
Canada’s Business Credit Availability Program (BCAP), will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses helping viable businesses to remain afloat during this uncertain times.
France has pledged 45 Bn Euros($50.22 Bn) to help struggling companies.
“We are going to mobilise 45 billion euros as our first immediate economic assistance to companies,”, “We don’t want bankruptcies.”– Le Maire
Since most of the major world economies is contributing a considerable chunk of the GDP to fight Corona Virus shocks on the economy, India should work in line with their counterparts in order to ensure the welfare of the MSME sector along with the employers and workers associated with them.
Being cognizant of the MSME sector contribution of 29% to the GDP, an economic stimulus package to the tune of at least Rs 5 Lakh Crore with at least Rs 1 Lakh Crore specifically for the MSME sector will prove to be a much needed relief for those who have lost businesses and employment in this unfortunate times of uncertainty and risk.