88% SMBs yet to avail any benefit under stimulus package: CIA

As many as 88% of respondents of a survey conducted among self-employed, small and medium businesses (SMB) said they were yet to avail any benefit under the stimulus packages introduced by the Centre while 82% felt the Union and State governments were not taking care of their interests.

These are the findings of a survey conducted by the Consortium of Indian Associations (CIA) and its 40 partner-SMB associations. The findings were released on Thursday. The survey covered more than 81,000 self-employed, micro/small businesses (SMBs) from across India, the CIA said.

The respondents included manufacturers (49%), service providers (15%), self-employed (14%) besides consultants, start-ups, traders, food and hospitality units.

“The 63 million micro, small enterprises (MSEs) and 40 million self-employed individuals in the country form the backbone of India’s economy,” said the CIA.

“The COVID-1 and 2-induced lockdowns over the last 15 months have severely crippled this sector, as disclosed by the findings of the report.”

As per the findings, 73% of SMBs have not made any profit during the last fiscal and 42% were unable to decide on retention of employees, 59% said they reduced/sacked/removed their staff compared witho the pre-COVID period.

“Over the past year, CIA has provided vital suggestions and modifications required on several initiatives taken by the Central and State gGovernments for the benefit of MSMEs,” said K.E. Raghunathan, convenor, CIA and former national president, All India Manufacturers’ Organisation.

“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,” he said.

The findings suggest that the government should adopt a three-pronged approach towards SMBs viz. exempting them from statutory compliances, penal actions and litigation; protecting them from high interest burden, price wars, high cost of raw materials, losing employees, penalties, and late fees and supporting them by giving liberal loans, clearing pending dues, offering moratorium with interest waiver and not declaring NPAs for the sector for a year.

CIA has proposed that the government amend the Micro, Small and Medium Enterprises Development Act, 2006, to strengthen State facilitation councils.

The findings also touched upon the point that the laws relating to land use by industries, especially MSMEs, need a relook as these were not conducive to their growth.

CIA has highlighted a series of long term and short-term measures to the Central and State gGovernments to beat the impact of the lockdown on the SMBs.

It has also proposed to start collecting data of sSelf-employed, MSME businesses in the country from banks. Based on this data, the business type could be correctly classified as traders, professionals, service providers, exporters, engineering enterprises, etc., as well as employees in them as migrant and formal.

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