MSMEs in multiple sectors viz., retail, aviation, hospitality, and others, which were among the worst hit due to Covid last year, had neared the pre-pandemic level recovery before the second Covid wave struck post February 2021.
Covid-hit MSMEs have now urged the government to allow them home delivery of goods during the lockdown period without a distinction between essential and non-essential products. The idea was part of a number of recommendations put forth to the government by the MSME body Federation of Indian Micro, Small and Medium Enterprises (FISME) on Tuesday “to enable MSMEs to create and sustain their livelihood during lockdowns culminating the learnings from the first and second wave of Covid-19,” the federation said. It also sought priority vaccination for home delivery personnel as frontline workers.
“It is not just food or grocery or medicines etc., your computer is also an essential product when you are working from home. So, what was treated as essential and non-essential last year, we cannot operate with those rules now. You need almost everything. What if your air conditioner breaks down now? Won’t it be an essential thing for you to buy a new one? Anything that can be safely delivered at home should be allowed. Safety is important and not what you are getting home delivered,” Anil Bhardwaj, Secretary General, FISME told Financial Express Online.
The federation also recommended ease of doing online business for small enterprises by reducing “compliance (GST) burdens and registration norms.” This would go a long way in enabling digitisation of MSMEs, it added. Further, protection against vandalism or police action for home delivery personnel with e-commerce and MSMEs was also among the key asks. “States must desist from making arbitrary changes to lockdown guidelines and must give a steady policy for a three-week period. This helps MSMEs manage their working capital and sustain their businesses. Any form of discontinuity or restriction of their businesses can lead to wiping out their existence itself,” said Bhardwaj.
MSMEs in multiple sectors viz., retail, aviation, hospitality, and others, which were among the worst hit due to Covid last year, had neared the pre-pandemic level recovery before the second Covid wave struck post February 2021. For instance, according to retailers’ body Retailers Association of India, monthly recovery of the retail sector had neared pre-Covid level for the month of February with sales touching 93 per cent during the month in comparison to February 2020. The association had expected a full recovery in March.
RAI, on its part, had also made recommendations to the Ministry of Finance and the Reserve Bank of India earlier this month. This included extending the benefits of ECLGS 3.0 to retail companies with additional funding, announcing a moratorium on principal and interest for six months for the 26 stressed sectors under ECLGS, mandating banks to give ad-hoc working capital loans of 30 per cent more than current limits so that critical payments like salaries and wages can be made, and providing Interest subvention to reduce the burden of interest. According to the association, the retail sector represented an investment of Rs 2,50,000 crore while almost Rs 75,000 crore could turn NPA if urgent measures to ease the working capital challenges are not taken.