Two-thirds of Micro, Small and Medium Enterprises (MSMEs) in India have been shut for a interval of three months or extra in FY2021 and over half of all MSMEs noticed a decline of over 25 per cent in revenues, in line with a survey of 1,029 such industries 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 2021 as a part of efforts to evaluate the financial impression of Covid-19 on MSMEs and to evaluate the impression of the change in MSME classification.
The Centre had in June 2020 as a part of its Covid reduction bundle revised thresholds for the classification of MSMEs. Under the brand new classification, manufacturing and companies items with funding of as much as Rs 1 Crore and turnover of as much as Rs 5 crore are labeled as micro companies, companies with funding of as much as Rs 10 crore and turnover of as much as Rs 50 crore are labeled as small enterprises whereas items with funding of as much as Rs 50 crore and turnover of as much as Rs 250 crore are labeled as medium enterprises.
About 66 per cent of respondents within the survey reported a decline in profitability on account of steady fastened prices and decline in income throughout FY2021 fiscal, in line with the reply tabled in parliament by Rane. About 65 per cent of the MSMEs surveyed availed credit score below the federal government’s Emergency Credit Line Guarantee Scheme (ECLGS), which offered banks and monetary establishments a 100 per cent assure in opposition to any losses suffered by them as a result of non-repayment of the ECLGS loans by debtors.
The examine additionally discovered that about 36 per cent of MSMEs surveyed had additionally availed loans below the Credit Guarantee Fund belief for Micro and Small Enterprises scheme throughout FY2021.