More needs to be done to save MSMEs and a 100 million jobs

This sector will have to be given more priority if we want to save millions from job losses and poverty. 

MSMEs,  micro amall and medium enterprises

A presentation by senior officials of the Micro, Small & Medium Enterprises (MSMEs) department has voiced the fear that over 100 million jobs are in danger as the recessionary grip of Covid-19 tightens across the country. Speaking to members of the Parliamentary Standing Committee on Commerce, these officials said the travel and tourism industry is among the worst hit as lakhs of employees in this labour intensive sector were without work.

Moreover, 50% of the Covid-19 cases are in areas that generate 72% of industrial production. The MSMEs were already in trouble as the economy was contracting even before the pandemic broke; but now, without orders and financial support, these small units have little future. The World Bank’s draft India Development Update (IDU) has corroborated these fears. It says the country is at “risk of losing its hard-won gains against poverty”, and warns that several million households are “likely to slip back into poverty due to income and job losses triggered by Covid-19”.

The progress India made between 2011 and 2015 when the poverty rate dropped from 21.6% to 13.4% may get affected; the IDU has identified the repeated extensions of lockdown as one of the debilitating factors. The nearly 64 million micro and small industries are the lifeblood of the economy, employing millions.

However, there’s not enough being done by the government to keep them going. For instance, the MSME report points out that the travel sector desperately needs support in the form of returning the GST of all cancelled tour programmes, and deferring interest and premium payment on loans for one year. Some of the Standing Committee members were right in questioning the government as to how much of the touted `21 lakh crore fiscal stimulus was finding its way to sustain MSMEs.

According to the IDU report, actual spending could be as low as 0.7-1.2% of the GDP in the current financial year. This sector will have to be given more priority if we want to save millions from job losses and poverty,

Courtesy indian express