This primary survey of 50 SME’s across various sectors assesses economic impact of covid-19 on small businesses in India.The different companies from various areas of business were required to fill the questions covering a vast number of areas like salary payments to the staff, disruption of supply chains, demand projections, inventory position and management, future expectations of the small businesses. The survey then further looks into the stimulus packages announced by Government and brings on a single platform all that is offered by the government in the name of stimulus. The survey then concludes by making certain suggestions that may help the SME’s to cope with the economic fallout of Covid-19 in a better way..
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4 Responses
Dr Seema Madam
‘Current relevant topic’ of support package to MSME by Govt of India has all aspects considered to dole out money…
Details in your complete blog are adequate for MSME operations
…but what I feel is that the revival and sustainability of MSME’ will be quick if Govt does reduce
1.Non Productive time of single owner multifaceted , multitasking executives in compliances , paperwork, unnecessary visits which will give more time to focus on business operations
2.Staff & Labour who have gone back will return with delayed joining till all aspects of Coronavirus is settled..or at least safe working is ensured
3. Time frame for utilising the package if MSMEs opt for support is subject to above
4.Demand creation/generation depends on purchasing power , earnings and needs with priority for only essentials..
5.Cautionary spending will lower demand hence spending..
6. External uncertain factors play a definite role….like
a. Second wave virus spread ,
b. Uncertain political scene….domestic/ international areas between countries
c. Natural calamities like extreme weather conditions, earth quakes , forest fires etc seems evident due to manmade Global warming
d. Indiscriminate uncontrolled pollution causing industries or activities be it air , water or nuclear accidents
e. Any groups causing disturbances, protests etc
All these will make uncertainties certain
..low confidence levels will be evident..hence spending caution causing lower demand
Think over and review …Priorities to be considered for short time range…
Long term plans require to be phasewuse executed
Keep up the ‘relevant ‘ thinking which brings concerned groups people become aware how to take care in these uncertain cautious times
Regards
Sir thanks so so much. You have hit the nail on the head. Your observations are very practical and your assessment of the situation and how to deal with it is grounded in reality. some of the factors like natural calamities or international trade are not fully under our control. However, there are many factors where a lot can be done . for that a lot of political will and bureaucratic support is required. we need to carry out simplification and reforms on many fronts which have been pending for a very long time. the problem is vested interests, a languid bureaucracy , apathy towards small business and so on so forth. i will try to incorporate all you thoughtful suggestions in my articles and also in my reports and suggestions to the government. Thanks for guiding me…
An entrepreneur or a small business man start and run business with limited resources and planning under a very uncertain and risky environment.They usually take risk with their hard money and time. MSME represent almost 30 percent of GDP and 40 percent of employment. A small business man needs to do his best to become successful whatever adverse conditions may exist. On him depends the livelihood of so many of his employees. He employs a lot of his own capital and doesn’t easily get credit/capital facilities at low rates of interest.
After a long struggle and continued self encouragement he makes little profits .Then he enters into establishment phase by paying a lot of both direct and indirect taxes. Indian tax system comes into the picture with 33 % income tax and complex system of GST.
If govt can charge us so many taxes, it is our expectation that they should come to our rescue in such dire times. Many governments in various other countries have already done so by meeting fully and partly the salary/wage bills and interest burden of SMEs.
My sincere request is to govt.is that please pay attention to small business man who is continuously putting his best efforts to build a nation. The government shall simplify the tax systems, give us rebates in taxes, make credit and capital available at cheaper rates and with sovereign guarantees and work on simplified direct cash benefit to SME’s. Moreover, the government shall step into smoothen the supply of raw material and infrastructure and create guaranteed demands with fix timelines for payment.
Yes Tarun. Your observations are very appropriate. all SMEs today face an existential crisis and government needs to support us in a big way. Moreover, the governments policy should be practical and implementable . They cant be a bag of hollow promises and impractical ideas of a languid bureaucracy which is more bureaucratic rather facilitative. Need something concrete on the ground and your suggestions are very good for that….