Moneycontrol PRO
Upcoming Webinar:Innovate Your Future at India Inc. on the Move on August 26 and 27, 2021 at 10am, with Rockwell Automation
you are here: HomeNewsBusiness

Millions of MSMEs may shut shop if govt delays support, warns CARE

The government plans to increase the MSME sector’s contribution to GDP to over 50 percent in the next few years. However this plan hasn’t progressed quite as planned.

May 11, 2020 / 06:45 PM IST

Majority of micro, small and medium enterprises (MSMEs) in India, a major employer to millions of workers, may have to shut shop unless immediate government support reaches them, warned rating agency CARE in a report on Monday.

“Besides the lockdown the sector is likely to witness tepid demand going forward due to the overall slowdown in the economy. Most small scale business may not be in a position to survive long without timely support from the government,” said CARE.

There are more than 6.3 crore unincorporated non-agriculture MSMEs (excluding construction) in the country engaged in different economic activities and the sector provides employment to more than 11.1 crore people. As for employment, the manufacturing segment would be affected more with around 75 percent employment being under pressure, CARE said.

The micro sector with 6.3 crore estimated enterprises accounts for more than 99 percent of the total estimated number of MSMEs. The small sector with 3.31 lakh and medium sector with 0.05 lakh estimated MSMEs account for 0.52 percent and 0.01 percent of total estimated MSMEs, respectively.

“The MSME sector comprises manufacturing, trade and service providers. A large number of MSMEs are ancillary units catering to the needs of large industries,” said CARE report.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

Even after one and a half months of nationwide lock-down, the government is yet to come with a rescue package for industries. This has put companies, especially smaller ones, in a tight financial position. The Reserve Bank of India (RBI) announced two rounds of COVID-19 relief measures but these steps have largely benefited only big firms.

These included two rounds of long term repo operations, special refinance facilities to NBFCs and a sharp cut in the policy rate. The government, on its part, announced a welfare package for the poor worth Rs 1.7 lakh crore to provide immediate assistance. But, it is yet to come with a solid fiscal stimulus package.

The government plans to increase the MSME sector’s contribution to GDP to over 50 percent in the next few years. However, this plan hasn’t progressed quite as planned.  MSMEs are already struggling with a slowdown in demand and disruptions led by demonetisation and GST implementation. The COVID-19 pandemic has further aggravated stress in the sector.
Moneycontrol News
first published: May 11, 2020 06:45 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark