A little more than two-thirds of the respondents believe they could reach the pre-covid levels of business by March 2021.
The micro-units have been affected more in terms of the impact of lockdown.
Businesses may recover to the pre-Covid levels only by the end of the current fiscal year even as the nationwide lockdown is over and the country is gradually unlocking its economy. There has been a pick-up in activity, but it will be a long way before pre-covid levels will be attained, said a survey report by Care Ratings. A little more than two-thirds of the respondents believe they could reach the pre-covid levels of business by March 2021, the survey showed. While all the corners of the economy faced the headwinds from the disruption caused by the coronavirus, the micro-units have been affected more in terms of the impact of lockdown.
The majority of respondents were of the opinion that standardised unlock guidelines (central) would have been better than localised guidelines. Talking about the rising NPAs with increasing incapability to pay the liabilities, the growth in non-performing assets is expected to be a major issue for the industry as more than half of the respondents in the micro, small & medium, and large companies expect this ratio to rise.
Another major ongoing problem is the shortage of labour. As a little over 1 crore migrant labourers returned to their home states due to the lockdown, nearly 35 per cent of the respondents from micro-enterprises category said that migrant workers had not returned to work in their company. The results showed that the labour crisis is more severe in the MSME sector than the large scale enterprises. The problem of migrant labourers was most relevant in construction, real estate, manufacturing, and power sector and was least relevant for BFSI sector followed by service and trading sector. Majority of real estate companies said that they are still facing labour problems and 38 per cent of construction companies said the same.
Slowdown before pandemic
A record 64 per cent of the respondents from the micro-enterprises’ category felt that their company was witnessing a slowdown prior to the outbreak of the novel coronavirus. However, 61 per cent of the respondents in the large enterprises’ category believed that their company was not experiencing any slowdown in the pre-pandemic times. For small and medium enterprises, half of the respondents agreed to a slowdown in business before the pandemic.