Corona Pandemic has shaken the entire economy of the world, where developing countries are suffering from the severe crisis of finance and cash flow in the market. Due to the breakout of Coronavirus there are many MSMEs facing difficulty in their survival. Many of them are not in a position to start up their enterprise after this long period of lockdown. From the study it can be assumed that 25% of the MSMEs could be out of business because of lockdown on account of Covid-19.

All the MSMEs are facing problems of logistics and labor scarcity. Production of factories is on hold, the supply of goods in the market is at stack. The people who have invested in growing companies are now at loss. Entrepreneurs who had gathered a stock of raw materials in a huge amount are now in a real fix of how to utilize it.

Moreover, the lock-down period has affected the supply chain of their products to their consumers severely. In this scenario, the sustainability of most of the MSMEs is at risk.

  • The Government of India has made a few decisions that would help MSMEs to strengthen their business in this pandemic situation. The government has postponed loans EMIs which would help entrepreneurs to survive with ease in the market.  It has also proposed to offer collateral-free loans, which would be fully guaranteed by the central government.In this principle suspension of repayment would be of 12 months with caped interest rate and no guarantee fees.
  • MSMEs have also got one more opportunity to help their business grow and sustain for which the government is giving the loan to the enterprises having turnover of up toRs. 100 Cr. with outstanding credit of Rs. 25 Cr. These loans will be having a time frame of 4 years to repay it for which no guarantee fees are charged.Under this, MSMEs would bare 40% of interest and 60% would be borne by the government.
  • Central Government has also taken steps to push the businessmen at a smaller scale by giving them a loan of Rs. 1 lakh. Whereas, this loan is given to only those who are into some kind of business since 2000. 
  • The government is also providing EPF Support for businesses and workers which are done to make the survival of the business.
  • Along with this Prime Minister has announced a relief package of Rs. 20 – lakh crore, which is explained by FM Nirmala Sitharanam. This is going to give relief to MSMEs in many different ways.
  • From the sources it is known that roughly 10 percent of the Indian GDP – announced measures to boost liquidity in MSMEs, help them take benefit of the government schemes, enable them to compete with foreign companies, and strengthen their network.

All these reliefs provided by the government will be working initially as seed money for the small business by giving a push to cash flow and commencing with the work.

Also, along with this, Nirmala Sitharaman revised the entire definition of MSMEs. Till now, Enterprises that invested less than Rs 25 Lakh, less than Rs 5 Crore and less than Rs 10 Crore in their businesses were now defined as micro, small, and medium enterprises. Now, the new investment threshold sits differently in this way: Micro enterprises sits at less than Rs 10 lakh, Small enterprises at less than Rs 2 crore, and less than Rs 5 Crore as medium enterprises. This definitional change is very progressive and beneficial to the MSMEs as it is in perfect harmonization with the GSTN Network.

Thus, immediate steps like dis-allowance of global tenders and Releasing immediate payments of all the MSMEs within 45 days have had a favorable impact as well. Thus, the whole economy is at a standby but the government is doing all it can to retrieve its former glory to the economy.

Covid-19 may have caused mayhem but it would not succeed in demoralizing or demotivating the citizens of India or India itself.


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