Comprehensive study must to know whether MSMEs recovered from Covid or not: Parliamentary panel

Ease of doing business for MSMEs: The committee, headed by DMK’s Rajya Sabha member Tiruchi Siva, also noted that many MSMEs struggle or fail due to a lack of proper financial knowledge or accessibility to financial guidance essential for running their businesses.

Written by Sandeep Soni

April 19, 2023 19:41 IST

parliamentary panel, parliamentary committee report, covid, parliamentary report on industry, covid impact on msmes, financial guidance for msmes, pandemic

The report also suggested a system to track the needs of MSMEs for their technological enhancement.

Ease of doing business for MSMEs: In order to fathom the current situation of the MSME sector and to know whether MSMEs have actually recovered from the pandemic effect or still reeling under its, impacts, a parliamentary committee report on industry has recommended the MSME ministry for a “comprehensive study”.

“It is learnt that performance of the MSMEs during the last five years has not been very encouraging…The committee may also like to be apprised about the findings of the study for its consideration considering the fact that a resilient and dynamic MSME Sector will be instrumental in realising the goal of Make in India and Atma Nirbhar Bharat,” the report presented in the Rajya Sabha in March this year noted.

Also read: Economic Survey: MSMEs’ Covid recovery evident in GST paid crossing pre-pandemic level

While a comprehensive study on the Covid impact on MSMEs hasn’t been done by the government, MSME ministry’s undertakings such as National Small Industries Corporation (NSIC) and Khadi and Village Industries Commission (KVIC) had conducted a study in 2021 for the same. According to the NSIC study, 91 per cent of MSMEs were found to be functional while 88 per cent of the beneficiaries of the Prime Minister Employment Generation Programme (PMEGP) as per the KVIC study were reported to be negatively affected due to Covid.

The committee, headed by DMK’s Rajya Sabha member Tiruchi Siva, also noted that many MSMEs struggle or fail due to a lack of proper financial knowledge or accessibility to financial guidance essential for running their businesses.

Hence, it asked the ministry to “devise a system in order to facilitate the MSMEs to have the benefit of financial guidance free of cost or paying a nominal charge from a network of financial advisors who have specialization in working of the MSMEs.”

Also read: Covid-hit micro enterprises struggling to recover with sales at 44%, profit at 31% of pre-lockdown levels: Survey

In addition, the panel also called for developing a system to monitor the requirements of MSMEs for their technological upgradation and ensure that they are using the most suitable technology to enhance the productivity and marketability of their products.

The ministry should work on the “creation of a platform to connect MSMEs with technology experts, professionals, universities and research institutions who can guide them in their technological upgradation in order to roll out quality products for both domestic as well as overseas markets.”