Lok Sabha Question No. 2883 (UNSTARRED), answered on 2021-08-05
Subject: Closed MSMEs
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: S. Jothimani

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

## LOK SABHA UNSTARRED QUESTION No. 2883 TO BE ANSWERED ON 05.08.2021

## Closed MSMEs

## 2883. MS. S. JOTHIMANI:

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

- (a) the number of MSMEs registered in the country during the last five years;
- (b) the number of MSMEs which have closed down during the said period and the reasons therefor;
- (c) the number of MSMEs that have shut down due to economic distress between March 2020 and July 2021;
- (d) the  steps  taken  by  the  Union  Government  to  assist  MSMEs  post  the  onset  of  the COVID-19 pandemic; and
- (e) the steps taken by the Government to support MSMEs that are close to bankruptcy?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NARAYAN RANE)

- (a): As per Udyog Aadhaar Portal, number of MSMEs registered (since September 2015 to 30.06.2020) in All India was 102,32,468.

On 1 st July, 2020, after adoption of new definition of MSMEs, a new registration portal 'Udyam  Registration'  has  been  launched  by  M/o  MSME  and  so  far  41,37,443  classified MSMEs are registered on the portal in All India (from 01.07.2020 to 31.07.2021).

- (b) & (c): As  MSMEs  are  present  in  both  formal  and  informal  sector,  data  regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises (MSME).

Studies  have  been  conducted  by  National  Small  Industries  Corporation  (NSIC)  and Khadi  and  Village  Industries  Commission  (KVIC)  to  assess  the  impact  of  COVID-19 Pandemic on MSMEs including units set up under Prime Minister's Employment Generation Programme (PMEGP).

- A. The main findings of the online study conducted by NSIC to understand the operational capabilities and difficulties faced by the beneficiaries of NSIC schemes amid Covid-19 pandemic are as follows:
- i. 91% MSMEs were found to be functional.

- ii. Five most critical problems faced by MSMEs were identified as Liquidity (55% units),  Fresh  Orders  (17%  units),  Labour  (9%  units),  Logistics  (12%  units)  and availability of Raw Material (8% units.)
- B. The findings of the study conducted by KVIC are as under:
- 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 during Covid-19 Pandemic.
- ii. Among the 88% who were affected, 57% stated that their units were shut down for some time 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 paid the salaries in full, 42.54% reported to have partially paid and 10.86% reported to have not paid salary for some time 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.

(d): The Ministry of Micro, Small and Medium Enterprises (MSME) implement various other schemes for the growth and development of MSME sector in the country. These include Prime Minister's Employment Generation Programme (PMEGP), Micro and Small Enterprises-Cluster Development Programme (MSE-CDP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS) and SC/ST Hub.

Post Covid-19, Government has taken a number of initiatives under Aatma Nirbhar Bharat  Abhiyan  to  support  the  MSME  Sector  in  the  country  especially  in  Covid-19 Pandemic. Some of them are:

- i)   Rs 20,000 crore Subordinate Debt for MSMEs.
2. ii)  Rs 3 lakh crores Collateral free Automatic Loans for business, including MSMEs.
3. iii) Rs. 50,000 crore equity infusion through MSME Fund of Funds.
4. iv) New revised criteria for classification of MSMEs.
- v)  New  Registration  of  MSMEs  through  'Udyam  Registration'  for  Ease  of  Dong Business.
6. vi) No global tenders for procurement up to Rs. 200 crores.

All  new  and  existing  Micro  and  Small  Enterprises  engaged  in  manufacturing  or services including trading activity are eligible to be covered under Credit Guarantee Scheme (CGS)  implemented  by  Credit  Guarantee  Fund  Trust  for  Micro  and  Small  Enterprises (CGTMSE).  CGTMSE has approved 4,35,520 guarantees for an amount of Rs. 30,168.57 crore during 2018-19, 8,46,650 guarantees for an amount of Rs. 45,851.22 crore during 201920, 8,35,592 guarantees for an amount of Rs. 36,899.39 crore during 2020-21.

Under  Interest  Subvention  Scheme  for  Incremental  Credit  to  MSMEs,  number  of beneficiaries and amount are 13,62,355 and Rs. 541.51 crore during 2019-20 and 9,08,860 and Rs. 431.07 crore during 2020-21.

As  part  of  the  Aatma  Nirbhar  Bharat  Abhiyaan,  under  the  Emergency  Credit  Line Guarantee Scheme (ECLGS), around 1.09 crore MSME borrowers have been provided with guarantee support amounting to Rs. 1.65  lakh crore  as on 02.07.2021.

An online Portal  'Champions' has been launched on 01.06.2020 by Hon'ble Prime Minister.  This  covers  many  aspects  of  e-governance  including  grievance  redressal  and handholding  of  MSMEs.  Through  the  portal,  total  35,361  grievances  have  been  redressed upto 12.07.2021.

(e): The  Reserve  Bank  of  India  issued  guidelines  on  'Framework  for  Revival  and Rehabilitation  (FRR)  of  Micro,  Small  and  Medium  Enterprises'  to  Scheduled  Commercial Banks (excluding Regional Rural Banks) in March 2016, the concept of sickness no longer exists.  Under  the  Framework,  banks  have  been  advised  to  identify  incipient  stress  (well before  the  account  turns  in  to  sick  category  as  per  the  earlier  definition)  in  the  MSME accounts and refer it to the Committees formed under the Framework for suitable Corrective Action Plan viz. rectification, restructuring and recovery. Bank-Group Category Wise data on FRR since the introduction of the guidelines till September 2020, is given below:

|         |                              | Accounts referred to the           | Accounts resolved by the Committee during the half year   | Corrective Action Plan by the Committee (out of (2))   | Corrective Action Plan by the Committee (out of (2))   | Corrective Action Plan by the Committee (out of (2))   |
|---------|------------------------------|------------------------------------|-----------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|
| Sl. No. | For the half year            | Committee during the half year (1) | (2)                                                       | Rectification                                          | Restructuring                                          | Recovery                                               |
| 1       | October 2016- March 2017     | 100803                             | 137282                                                    | 80905                                                  | 2197                                                   | 54180                                                  |
| 2       | April 2017- September 2017   | 87062                              | 95107                                                     | 58512                                                  | 207                                                    | 36388                                                  |
| 3       | October 2017- March 2018     | 130208                             | 130473                                                    | 81492                                                  | 1024                                                   | 47957                                                  |
| 4       | April 2018- September 2018   | 150165                             | 123227                                                    | 76172                                                  | 201                                                    | 46854                                                  |
| 5       | October 2018 to March 2019   | 142275                             | 146519                                                    | 78737                                                  | 15425                                                  | 52357                                                  |
| 6       | April 2019- September 2019   | 223786                             | 201768                                                    | 103729                                                 | 14279                                                  | 83760                                                  |
| 7       | October 2019- March 2020     | 339728                             | 324621                                                    | 71938                                                  | 148369                                                 | 104314                                                 |
| 8       | April 2020 to September 2020 | 751528                             | 846371                                                    | 180792                                                 | 185876                                                 | 479703                                                 |

Source: As reported by Scheduled Commercial Banks

*Number of cases resolved by the committees is more than the cases referred due to some pending  cases  with  the  committees  at  the  beginning  of  the  half  year  which  have  been resolved during the period.

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