The mass destruction of business has begun with over 35% of MSMEs and 37% of self-employed persons shutting down their operations despite the financial packages announced by the Centre, said All India Manufacturers Organisation (AIMO).
These were the findings a survey initiated by AIMO in association with Digitally 4 Empowerment, Federation of India Industry, Association of Indian Industry, Cement Manufacturers Welfare Association, Consortium of Women Entrepreneurs of India, Federation of Indian Women Entrepreneurs and First World Community among others.
“We received about 46,525 responses for our survey. The most striking aspect was that 35% of MSMEs and 37% of the self- employed respondents said that they see no chance of recovery in their business and have begun shutting down their operations,” said K.E. Raghunathan, immediate past president, AIMO.
According to him, India has over 65 million MSME’s employing over 150 million people and over 130 million people are self employed. Start-ups account for over 11% of the MSME’s.
“The financial stimulus provided by the Centre is not applicable to us in the Start Up sector. We have already issued the termination letters to our employees and have begun the process of winding down. The unfortunate part is that though we believe in our business model and have the best talent, we do not have the financial strength to carry on and also I think it will be difficult for our employees to get jobs in the current scenario,” said Anand Prakash, owner of a technology start-up from Bengaluru.
As per the survey report, uncertainty of continuing business, rather undecided category of respondents is about 11% in MSME category and about 17% in self employment category. They still have scope to recover. About 46% of the respondent felt it might take three months to recover, while 26% felt they will bounce back by the end of the current year.
“ Our business depends on the business of our clients. We are uncertain on whether they will continue, if so at what scale and how much budgets they will be allocated for the specific heads. We have been informed that they will revert only post October. This is a period of uncertainty for us in the design industry on whether to search for a job or continue as a freelance designer,” said Ruhi Jain, a Delhi-based freelance designer.
While we appreciate and thank the Union Finance Minister and Prime Minister for addressing the needs of MSME’s, still the benefits of financial packages has not reached the doorsteps of the MSME’s and also it is inadequate to meet the impact of COVID-19 due to non-operation of business in the last three months, said Mr. Raghunathan.
