‘Any disruption in MSMEs’ sales amid second Covid wave to be detrimental to their survival this time’
April 18, 2021 2:03 PM
Ease of Doing Business for MSMEs: E-commerce platforms had matched and surpassed their pre-COVID sales as far back as August last year. To this effect, several MSMEs shifted to online marketplaces last year owing to a lack of demand in retail markets.
Although it may make sense to limit trading at retail shops and prevent overcrowded markets, a similar blanket approach for home-delivery of products does not seem logical.
By Vinod Kumar
Ease of Doing Business for MSMEs: In the past one month, India has seemingly come a full circle around one of the most devastating years it has seen in recent memory. The on-and-off lockdowns and the severe rise in COVID cases from last year have come as a flashback since early March, as the number of daily COVID cases in India increased by more than 1500 per cent – from reporting 2,000-5,000 around cases a day to nearly 2 lakh cases a day. Our country is irrefutably witnessing a vicious-second wave of the virus. In the past one month (March 14-April 14), the number of daily cases being reported in Maharashtra – one of India’s COVID hotspots – shot up by more than 200 per cent, which somehow trails the rise in COVID cases in Delhi – by more than 4,000 per cent and Uttar Pradesh by more than 6,000 per cent.
These are worrying trends for the public-health authorities, as well for the informal-sector workers, the middle-class, and MSMEs – who may fear another wave of lockdowns. These groups are most vulnerable to the lockdown policies and are yet to recover from last year’s shocks. While we may not have official data on COVID’s impact on MSMEs or startups, a Pew Research publication from March 2021 reported that more than 32 million Indians in the last one year were pushed out of the middle-class income group, and the number of poor in India ballooned from 59 million to 134 million.
Therefore, as we enter this second-and-severe wave of the pandemic, it is imperative that we learn from our last year’s experiences and plan policies that ensure calm and focuses on protecting both, lives and livelihoods. Several states in India have now started contemplating different versions of lockdowns and curfews. As we may go down that road again, it is important to maintain clear communication and conceive coherent policies, moving away from the practice of blanket bans.
Taking the case of Maharashtra, the state government on April 13 announced lockdown guidelines to arrest the spread of COVID-19. The guidelines prohibit all the non-essential movements in the state and have pushed employees and students back to operating from home. Contrastingly, however, the government has limited e-commerce/home deliveries in the state (along with retail shops) to ‘essential products’ only – such as groceries, medicines, etc. While the lockdown is a welcome move, the decision to limit home-delivery of products to ‘essential’ may prove counterproductive for citizens to brace another wave of lockdowns, as well as for protecting the livelihoods of people working from home.
Our one key learning from last year has been the importance of home deliveries by nearby shops and e-commerce platforms, for ensuring that people do not go to the markets. Furthermore, it is important to understand that even as the lockdowns have been imposed, a significant share of the population continues to work from home, dependent on the supplies of electronics, chargers, stationery, etc. While these products may not constitute as ‘Essential’ as per Official definitions, they are nevertheless ‘essential’ for a person to sustain their livelihood amidst lockdowns. The definition of an ‘essential item’ is highly subjective to an individual’s needs and requirements of the time and easily can range from an air-conditioner to a pressure cooker to a mobile phone charger. Therefore, it becomes an unfair policy to define certain goods as essential and others as non-essential, regardless of a citizen’s imperative individual needs.
Although it may make sense to limit trading at retail shops and prevent overcrowded markets, a similar blanket approach for home-delivery of products does not seem logical. For the purposes of citizens’ ease, as well as to the benefit of retail shop-owners, the government may look towards allowing home-delivery of all products, provided they strictly abide by contact-less and cash-less delivery.
E-commerce and mom-and-pop delivery chains efficiently demonstrated their ability last year to deliver products to citizens, while maintaining health safety – following practices like contact-less and cashless deliveries. In the case of e-commerce operators, several have an extensive infrastructure of delivery executives in place, well-acquainted with COVID-safe behaviors. It is important that we leverage these infrastructures for citizen welfare, rather than underutilize them.
By limiting people’s access to the products of their need, we are only increasing the general frustration – as it gets reflected on social media – and impeding their efforts to sustain their lives from homes.
Rather than the state Government disallowing “non-essential” sales – to main a level playing field – it should allow home-delivery of all products, by both: e-commerce and retailers, provided that COVID norms are strictly adhered too. Furthermore, to allow better discovery of customers, the government may also encourage retailers to participate in online marketplaces and capitalize on consumer demand online.
While it took traditional retailers nearly a year to inch closer to their pre-COVID sale volumes, according to the latest data by the Retailers’ Association of India, e-commerce platforms had matched and surpassed their pre-COVID sales as far back as August last year. To this effect, several MSMEs shifted to online marketplaces last year owing to a lack of demand in retail markets. To these MSMEs, any disruption to their sales would be detrimental to their survival.
Last year’s wave of infections and lockdowns had pushed India, its middle-class, and MSMEs into great depths. The affected individuals are yet to see a full revival, and it is amid these times where we face a second-and-severe wave of COVID. It is within the context of these glaring realities that makes it imperative to be strategic in our policy approach and ensure to protect both, lives and livelihoods.
Vinod Kumar is the President of India SME Forum. Views expressed are the author’s own.