Ease of Doing Business for MSMEs: MSME Secretary BB Swain has called for evaluating the extent of damage due to the Covid pandemic on MSMEs. Swain was speaking at the BRICS MSME Roundtable hosted by the Ministry of MSME recently focusing on the group’s vision towards a post-Covid roadmap for ‘the growth accelerating sector’ — MSME. Swain also called for evaluating the Covid response policies or programmes of the government for safeguarding MSMEs. The idea for BRIC – the economic bloc of countries including Brazil, Russia, India, and China — was conceived by Goldman Sachs as part of an economic modeling exercise to forecast global economic trends over the next half century, according to the Ministry of External Affairs. The acronym BRIC was first used in 2001 by Goldman Sachs. South Africa had joined the alliance in December 2010.
MSMEs across most of the sectors took a severe hit due to lockdown-induced restrictions in business operations and labour movement. However, there has been no formal data with the government on the number of units impacted or shut. Former MSME Minister Nitin Gadkari earlier this year in a written reply to a question in the Rajya Sabha had reasoned that since “MSMEs are there in both formal and informal sector, data regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises (MSME).”
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However, the minister had said the figures of the real GDP in India during the first quarter of 2020-21 indicated that economic activity contracted due to the strict lockdown measures imposed by the Government and this contraction also had an impact on the MSME sector. According to the MSME Ministry, Khadi and Village Industries Commission (KVIC) had undertaken a study recently to assess the impact of the pandemic on the micro-units set up under the Prime Minister’s Employment Generation Programme (PMEGP). 88 per cent of the PMEGP beneficiaries reported that they were negatively affected while the remaining 12 per cent were benefitted due to Covid.
Last year September as well, former MSME MoS Pratap Chandra Sarangi in the Rajya Sabha had said that “no such record is available” for the number of MSME units shut down during the March-August 2020 period of the pandemic. In fact, there was no data with the government on the number of MSMEs closed down from FY15 to FY20, according to Chandra. Likewise, in the same month, the Commerce Ministry had informed that no data on the number of startups that were shut operations due to Covid and those which managed to continue was maintained by the Department for Promotion of Industry and Internal Trade.