Lok Sabha Question No. 2042 (UNSTARRED), answered on 2021-12-09
Subject: Lockdown/Covid Impact on MSME Sector
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Chandra Sekhar Sahu, Rahul Ramesh Shewale, Pritam Gopinath Munde, Girish Bhalchandra Bapat

2042.

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

## LOK SABHA UNSTARRED QUESTION NO.2042 TO BE ANSWERED ON 09.12.2021

## LOCKDOWN/COVID IMPACT ON MSME SECTOR

SHRI CHANDRA SEKHAR SAHU: SHRI RAHUL RAMESH SHEWALE: DR. PRITAM GOPINATHRAO MUNDE: SHRI GIRISH BHALCHANDRA BAPAT:

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

- (a) whether the Micro, Small and Medium Enterprises (MSME) sector in India has emerged as a highly vibrant and dynamic sector of the Indian economy and if so, the details thereof;
- (b) whether  the  MSMEs  have  been  adversely impacted by the Covid-19 pandemic resulting in huge impact  on  the  Indian  economy  and  if  so,  the  details thereof;
- (c) whether the Union Government has proposed to include retail and wholesale trade under the MSME to increase the scope and constituents of the MSME sector and if so, the details thereof; and
- (d) the extent to which the proposed assistance will enable  MSMEs  tend  to  some  of  the  most prevalent concerns?

## ANSWER

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

- (a): The Micro, Small and Medium Enterprises (MSME) Sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. It contributes significantly in the economic and social development of the country by fostering entrepreneurship and generating largescale employment opportunities at comparatively lower capital cost, next only to agriculture. As per the information received from National Statistical Office (erstwhile Central Statistics Office), Ministry of Statistics & Programme Implementation, share of MSME Gross Value Added (GVA) in All India GDP at current prices (2011-12) for the year 2017-18, 2018-19 and 2019-20 were 29.7%, 30.5% and 30.0% respectively.
- (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): Yes, Sir. On 02.07.2021, the Government has included retail and whole sale trades as MSMEs and they are  allowed  to  be  registered  on  Udyam  Registration  Portal.  This  will  help  more MSMEs to take benefits of Priority Sector Lending.

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