Lok Sabha Question No. 2827 (UNSTARRED), answered on 2021-08-05
Subject: Revival of Severely Impacted MSME Sector
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Poonam (Mahajan) Vajendla Rao, Ramya  Haridas

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

## LOK SABHA UNSTARRED QUESTION NO.  2827 TO BE ANSWERED ON 05.08.2021

## Revival of Severely Impacted MSME Sector

## 2827.   SHRIMATI POONAM MAHAJAN: MS. RAMYA HARIDAS:

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

- (a) whether the Government is aware of the fact that due to nation-wide lockdown in the country in 2020 and 2021, the Micro, Small and Medium Enterprises (MSME) sector  was  severely  affected across  the  country particularly in the State of Kerala and Maharashtra?
- (b) if so, the details thereof;
- (c) whether the Government has initiated any steps to help/revive the severely affected MSME sector; and
- (d) if so, the details thereof and if not, the reasons therefor?

## ANSWER

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

(a) & (b): COVID-19 epidemic has temporarily affected various sectors including Micro, Small and  Medium  Enterprises  in  the  country.  Economic  activity  contracted  due  to  the  strict  lockdown measures imposed by the Government. This contraction has also had impact on the MSME sector.

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.

(c) & (d): The Ministry of MSME implements various schemes and programmes for growth and development of MSME Sector in the country including Kerala and Maharashtra. These schemes and programmes  include  Prime  Minister's  Employment  Generation  programme  (PMEGP),  Scheme  of Fund  for  Regeneration  of  Traditional  Industries  (SFURTI),  A  Scheme  for  Promoting  Innovation, Rural Industry & Entrepreneurship (ASPIRE), Interest Subvention Scheme for Incremental Credit to MSMEs, Credit Guarantee Scheme for Micro and Small Enterprises, Micro and Small Enterprises Cluster  Development  Programme  (MSE-CDP),  Credit  Linked  Capital  Subsidy    and  Technology Upgradation Scheme (CLCS-TUS).

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 Doing Business.
6. vi) No global tenders for procurement up to Rs. 200 crores, this will help MSME.

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 36,373 grievances have been redressed upto 1.08.2021.

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