Lok Sabha Question No. 681 (UNSTARRED), answered on 2021-02-04
Subject: Impact of COVID 19 on MSME Sector
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Sukanta Majumdar, Vinod Kumar Sonkar, Bhola Singh, Raja Amareshwara Naik, Nisith Pramanik, Sangeeta Kumari Singh Deo, Jayanta Kumar Roy

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 681

## TO BE ANSWERED ON 04.02.2021

## IMPACT OF COVID 19 ON MSME SECTOR

## 681.    DR. SUKANTA MAJUMDAR:

SHRI VINOD KUMAR SONKAR:

SHRI BHOLA SINGH:

SHRI RAJA AMARESHWARA NAIK:

SHRI NISITH PRAMANIK:

SHRIMATI SANGEETA KUMARI SINGH DEO:

DR. JAYANTA KUMAR ROY:

Will  the  Minister  of  MICRO,  SMALL  AND  MEDIUM  ENTERPRISES  be  pleased  to state:

- (a) whether  the  Government  has  made  any  assessment  of  impact  of  COVID-19  and lockdown on the Micro, Small and Medium Enterprises (MSME) sector;
- (b) if so, the details thereof;
- (c) whether  the  Government  has  taken  various  initiatives  under  Atmanirbhar  Bharat Abhiyan for MSME Sector;
- (d) if so, the details thereof and the current status of their implementation;
- (e) whether the Government has taken any technology based initiatives and interventions to tackle COVID-19 challenge; and
- (f) if so, the details thereof and the other major steps being taken by the Government for the development of MSME sector?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NITIN GADKARI)

(a) & (b): Ministry of Micro, Small & Medium Enterprises (MSME) has conducted a study through Khadi and Village Industries Commission (KVIC) to assess the impact of COVID-19 pandemic on the micro units set up under the Prime Minister's Employment Generation Programme (PMEGP) and below are the main findings:

- i. 88% of the beneficiaries of PMEGP scheme reported that they were negatively affected  due  to  Covid-19  while  the  remaining  12%  stated  that  they  were benefitted due to Covid-19.
- ii. Among the 88% who were affected, 57% stated that their units were shut down during this period, while 30% reported drop in production and revenue.
- iii. Among the 12% who had benefitted, 65% stated that their business increased as they had units in retail and health sector and around 25% stated that their units benefitted as they were dealing with essential commodities or services.

- iv. On the question of regular payment of salaries to the employees, around 46.60% respondents stated that they had fully paid the salaries, 42.54% reported to have partially paid and 10.86% reported to have not paid salary during this period.
- v. Majority of the beneficiaries expressed the need for additional financial support, relaxation of waiver of interest and marketing support for their products.

(c) & (d): Government has announced a comprehensive package of Rs.20 Lakh crore for  all  the  sections  of  the  society  including  Industries  and  MSMEs,  under  Atmanirbhar Bharat Abhiyan (ABA). Announcements pertaining to MSMEs and their current status are given below:

- i. Emergency  Credit  Line  for  MSMEs:  Government  has  operationalized  Rs. 3,00,000  crore  collateral  free  loan  scheme  w.e.f.  23.05.2020  which  is  likely  to benefit 45 lakh MSMEs. As on 01.01.2021, loans for an amount of Rs. 2.10 lakh crore have been sanctioned.
- ii. Rs. 20,000 crore as Subordinate Debt for Stressed MSMEs: As on 31.12.2020, 249 guarantees have been approved amounting to Rs. 27.27 crore.
- iii. Rs.  50,000  crore  Equity  infusion  for  MSMEs  through  Fund  of  Funds  (FoF): CCEA has approved a corpus  of  Rs.  10,000 crore for  Fund  of  Funds  scheme. The detailed guidelines have been issued by the Ministry of MSME.
- iv. No Global tenders for government procurement up to Rs. 200 crore
- v. Clearing  of  payment  due  to  MSMEs:  Government  has  announced  that  MSME dues should be cleared by the Government agencies and CPSEs within 45 days. Since May 2020 and up to 11.01.2021, pending payments of Rs. 26,363.75 crore have been made to MSMEs out of the total dues of Rs. 33,323.92crore.
- vi. Initiatives taken by Ministry of MSME through KVIC for providing employment opportunities to people including migrant workers under ABA in 116 districts of 6 States:
7.  Under  PMEGP,  margin  money  amounting  to  Rs.  207.49  crore  has  been disbursed for setting up 5924 units.
8.  Under beekeeping/Honey Mission, 335 beneficiaries have been trained and 3350 bee colonies and toolkits have been distributed.
9.  Under Kumbhar Shashktikaran Programme, 1000 potters have been trained and electric pottery wheels have been distributed.

(e) & (f): Technology  based  initiatives  and  various  steps  taken  by  the  Ministry  of MSME for development of MSME sector are as under:

- i. Champions.gov.in, a single interactive platform with 64 control rooms across the country, has launched by the Ministry in June, 2020, to provide prompt redressal to MSME grievances at the field level.
- ii. Government  is  working  towards  creating  e-commerce  linkages  for  MSMEs including creation of online portals. KVIC has launched its portalwww.ekhadiindia.com for Business to Customer (B2C) outreach of KVI micro businesses.

- iii. Online  Entrepreneurship  Development  Programme  (EDP)  Training  has  been initiated expediting the release of loan to the entrepreneurs under PMEGP.
- iv. MSME-Development Institutes (DIs) are working closely with Industry Associations and providing hand-holding support for bank  loans,  Udyam registration, e-passes, and GST.
- v. MSME-DIs are also working with State Governments in helping the MSME units for procuring raw materials for manufacturing of masks, PPE kits, etc.
- vi. The  rate  of  interest  under  'Raw  Material  Assistance  Scheme  (RMA)  against Bank Guarantee' has been reduced by 1.50% per annum w.e.f. 1 st June, 2020 and again  by  0.50%  per  annum  on  1 st October,  2020  to  provide  cheaper  financial assistance to MSME units.

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