Micro, small and medium enterprises (MSMEs) seem yet to recover from the twin shocks of demonetisation in 2016 and a chaotic introduction of goods and services tax (GST) last year as the loan defaults margins of small businesses almost doubled in the last financial year ending on March 2018 to Rs 16,118 crore from Rs 8,249 crore by March 2017, according to a report by The Indian Express. The data collected by The Indian Express under the Right to Information (RTI) act showed that MSMEs registered their non-performing assets or bad loans at Rs 98,500 crore in the last financial year from Rs 82,382 crore in the previous financial year ended on March 2017. MSMEs are the units where the investment in machinery and plants is above Rs 25 lakh but does not exceed Rs 5 crore. Of the total loan defaults during the period, public sector banks accounted for about 65.32% in outstanding loans to small units. This however was down marginally from 66.61% last year. While credit growth picked up significantly, the outstanding advances to micro and small units rose by 6.72% during the period to Rs 10,49,796 crore from Rs 9,93,655 crore in the previous fiscal ended on March 2017, the data showed. It is noteworthy that for the first quarter of current financial year 2018-19, the government on Friday announced a GDP growth of 8.2%. In the same period last financial year, GDP growth was recorded at 5.7%, mainly in the wake of the sudden move by the government to withdraw old Rs 500 and Rs 1,000 bank notes on November 8, 2016. Most of the micro and small units were affected the most by the note ban and reported huge losses even after 21 months. In a separate study on MSMEs two weeks ago, the RBI noted that the sector was hit hard because of two major reasons - demonetisation and GST. Smaller districts were affected the most due to the cash crunch during demonetisation compared with the lager centers, it added. SMERA Ratings Ltd conducted a survey recently wherein it found that over 60% of the respondents realised that their systems were not ready for the new tax regime. Meanwhile, a separate study by the Small Industries Development Bank of India showed that the relative credit exposure post demonetisation though dropped significantly and turned negative for most MSMEs, it fully recovered by March 2018.