Less than half of MSMEs have reopened for work: FISME

By

Isabelle Crossley

Published
Jun 17, 2020

Less than half of micro, small, and medium enterprises have restarted business operations during the government’s ‘Unlock 1.0’ plan to ease lockdown, while a lack of cash flow threatens many MSMEs’ survival.

“Even before the pandemic the MSME sector had been under stress,” the Federation of Indian Micro, Small and Medium Enterprises’ president Animesh Saxena told ET Digital in an interview. “There were the challenges of payments not coming on time, and lack of skill set and limited technology being available. These were some of the challenges MSMEs were already facing. The pandemic has brought havoc on this sector.”
 
Even as lockdown eases, many MSMEs still lack ample orders to allow for business to continue, according to Saxena. A lack of work and cash flow is a significant threat to MSMEs across sectors and could lead to many businesses having to close down.

“Most MSMEs have a limited number of people and most of them are technically qualified and you need them to run your operation,” said Saxena. “Around 30 to 40% units have opened and work has begun as they had some unfinished orders to complete, which they were unable to do because of the shutdown.”
 
Saxena cited fear concerning the rapidly increasing number of confirmed coronavirus cases in India as a reason why workers are reluctant to return to work. India counts over 3.5 lakh Covid-19 cases and crossed a grim milestone announcing on Wednesday evening that over 2,000 people had died of the virus in the last 24 hours, Aljazeera reported.