88 pc micro and small enterprises yet to avail govt’s COVID stimulus package, CIA survey shows
Eighty-eight percent of over 81,000 self-employed and micro/small businesses from across India are yet to avail of any stimulus package announced by the government following the COVID-19 induced lockdowns.
This startling information was a part of the findings of a survey conducted by the Consortium of Indian Associations (CIA) and its 40 partner small and medium associations, which was released today.
The respondents included manufacturers (49 percent), service providers (15 percent), self-employed (14 percent), consultants, traders, food and hospitality, and others.
CIA released its survey findings at a virtual press conference today.
In a virtual press conference, representatives of various associations rued the fact that COVID-19-induced lockdowns over the last 15 months have severely crippled the sector, especially micro and small enterprises and more than 40 million self-employed individuals in the country. Such has been the devastation that 80% of these micro and small enterprises feel insecure about the future.
In May, Finance Minister Nirmala Sitharaman rolled out a slew of initiatives under the Rs 20 lakh crore Aatmanirbhar Bharat stimulus package. Of the 15 schemes announced by the government, six were for MSMEs.
The three main ones were the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) collateral-free loan scheme, the Rs 20,000 crore subordinate debt for MSMEs, and the Rs 50,000 crore equity infusion through the Funds of Funds (FoF).
About 88 percent of the respondents said they had not availed of the stimulus package so far either due to ineligibility or because they were unable to entirely fulfill the strict criteria for availing the benefits.
Some of the other highlights of the survey included the fact that 73 percent of SMBs have not made any profit during the last financial year and 82% felt that the central and state governments weren't looking after their interests.
Releasing the report, KE Raghunathan, Convenor of CIA and former national president of All India Manufacturers' Organisation, said, "Over the past year, CIA has provided vital suggestions and modifications required on several initiatives taken by the central and state governments for the benefit of MSMEs. As a result, we realised that a data-backed survey would help consolidate the feedback from this sector to bring out the pain points and provide solutions and a way forward to revive the sector."
The report recommends adoption of a three-pronged approach towards micro and small businesses to mitigate the challenges being faced by the sector. These include:
- Exemption from statutory compliances, penal actions, and litigation.
- Protection from the high-interest burden, price wars, high cost of raw materials, losing employees, penalties, and late fees.
- Support by giving liberal loans, clearing off the pending dues, offering moratorium with interest waiver, and not declaring NPAs for a year.
The report also recommended an amendment to the Micro, Small and Medium Enterprises Development Act of 2006 to strengthen the state facilitation councils.
Ravi Sood, General Secretary of Badli Industrial Estate Association, added, “Micro Small Enterprises Facilitation Centers should be given more power to conduct their proceedings in a transparent and time-bound manner, and enforce payment of the specified interest to the aggrieved MSMEs. The government also needs to make changes in the GST Act to make it SMB friendly."