67% Indian MSMEs Shut Down Temporarily In Last 12 Months; 50% Lost 25% Revenues
In a survey conducted by Small Industries Development Bank of India (SIDBI), it has been found that the pandemic and lockdown had a very decremental impact on Indian startups and small businesses.
Infact, around 67% of Indian MSMEs were temporarily shut down in the last 12 months, and around 50% lost 25% of their revenues.
Here are more details..
Pandemic Impact: 67% Indian MSMEs Temporarily Shut Down
MSME Minister Narayan Rane shared the survey results conducted by Small Industries Development Bank of India (SIDBI), and shared some depressing news.
The survey was conducted across 1029 enterprises in India, categorized under MSME.
As per the report, 67% of the Indian MSMEs were shut down for atleast 3 months in FY21, while 50% of the MSMEs lost 25% of revenues.
As per the new classification, businesses with Rs 1 to Rs 5 crore revenues are classified as Micro Businesses; businesses with investment upto Rs 10 crore and revenues less than Rs 50 crore are classified as small enterprises and businesses with investment upto Rs 50 crore and turnover upto Rs 250 crore are classified as medium enterprises.
Govt of India has asked SIDBI to conduct this research to find out about the impact of lockdowns and the pandemic.
What Causes This Loss In Business
As per the survey results, stable fixed costs and decline in revenue caused 66% of the MSMEs to have reduced revenues, while 65% of the MSMEs availed Emergency Credit Line Guarantee Scheme (ECLGS) to run their businesses.
Approximately, Rs 2.88 lakh crore of loans were disbursed under ECLGS scheme.
At the same time, around 36% of the MSMEs availed loans under Credit Guarantee Fund trust for Micro and Small Enterprises.
Primary issues faced by the MSMEs include: liquidity issues, fresh orders, availability of labour, logistics issues and availability of raw materials.
We will keep you updated, as more details come in.