Report of the Parliamentary Committee on Impact of COVID-19 on MSMEs
Report of the Parliamentary Committee on Impact of COVID-19 on MSMEs
Recently, the committee has revealed the need for a new economic package to help small businesses.
- The Parliamentary Committee to Study the Impact of COVID-19 on Micro, Small and Medium Enterprises (MSMEs) has clarified in its report that the ‘stimulus package’ announced by the government is inadequate.
- The measures taken during this period are mere alternatives to borrowing rather than improving cash flow to generate demand as an immediate relief. At the same time, these measures seem to be based on long-term results, while there is a need for quick-resulting measures in this crisis.
Key Findings:
- The issues faced by MSMEs include non-availability of credit facilities and working capital, high informality, low financial flexibility, availability of raw materials etc. Additionally, supply chain disruptions, payment delays and the global slowdown during the pandemic have adversely affected them.
Key Recommendations:
- A comprehensive economic package should be provided for the purpose of boosting demand, investment, exports and employment generation.
- A detailed study needs to be done to assess the actual damage caused to the MSMEs sector.
- A new National Employment Policy can be considered by analyzing the feasibility of setting up a National Electronic Employment Exchange.
- Strict provisions need to be made against pending payments.
- Concerted efforts should be made to create awareness regarding the launch of a new enterprise registration portal.
Importance of MSMEs in India:
They contribute about 30 percent of the country’s GDP and about 40 percent of the total exports. Also, they provide employment to about 110 million people across the country. There are about 6.3 crore MSMEs in India.
Source – PIB
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