According to the Department of MSME’s Annual Report, which was published in September 2019, India has 6.34 crore MSMEs.

The COVID pandemic has left an indelible mark on the economy. Global supply networks are disrupted, imports and exports are hampered, and unemployment is increasing. Micro, Small, and Medium Enterprises (MSME) have been severely impacted globally, including in India.

Thousands of stranded and unemployed migrant workers around the country demonstrate how MSMEs have been the worst sufferers of the COVID-19 pandemic. Even though the government has taken many initiatives to protect and prioritize MSMEs during this challenging period.

MSMEs: Backbone of the Indian economy

MSMEs play a significant part in India’s economy. This sector contributes a significant 30% of India’s GDP and employs an estimated 28% of the workforce. They contribute to the livelihoods of nearly 100 million people. According to estimates, the sector created between 13.5 million and 14.9 million new employment each year between 2015 and 2019, serving as India’s economic backbone.

The Indian government must prioritize MSMEs in their post-COVID survival and recovery efforts. However, in order to survive and thrive after the crisis, the government and businesses must work together. In the aftermath of COVID, the government has taken a number of steps to prioritize MSMEs. This activity includes:

i) Bailout packages

The government is already considering a bailout plan for the sector. According to sources, there is a proposal to guarantee Rs 3 trillion in loans to small firms. The Union Minister of MSMEs has also stated that a corpus of Rs 10,000 crore is on its way to purchase up to 15% equity in MSMEs with strong credit ratings.

MSMEs also need more extensive and intelligent approaches to assist smaller businesses.

ii) Make easy loans available

To assure the survival of medium and small-scale firms in the next months, it is critical to give the necessary liquidity to keep their basic operations functioning. As a result, it is essential to make accessible, low-interest loans available to the MSME sector right away. The loan amount provided to each organization must be sufficient to cover at least two to three months of operational costs.

Various steps were taken for the Revival and Prioritising   Indian MSMEs due   to the COVID-19   Pandemic :

The Prime Minister’s Employment Generation Program (PMEGP), the Scheme Fund for Regeneration of Traditional Industries (SFURTI), A Scheme for Promoting Innovation, Rural Industry, and Entrepreneurship (ASPIRE), the Interest Subvention Scheme for Incremental Credit to MSMEs, the Credit Guarantee Scheme for Micro and Small Enterprises, the Micro and Small Enterprises Cluster Development Programme (MSE-CDP), the Credit Linked Capital Subsidy, and the Technology Upgradation Scheme (CLCS-TUS) are just a few of the schemes and programs that are implemented by the Ministry of MSME for the growth and development of the MSME sector in the nation.

Under the Aatma Nirbhar Bharat Abhiyan, the government has recently launched a number of programs to give the MSME sector in the nation priority, particularly amid the COVID-19 epidemic. Among them are:

i) Subordinate Debt of Rs 20,000 Crore for MSMEs.

ii) Collateral Automatic Loans of Rs. 3 lakh crores for MSMEs and other businesses.

iii) The MSME Fund of Funds would infuse Rs. 50,000 crore in equity.

iv) Recently updated standards for MSMEs’ classification.

v) MSMEs can now register themselves through “Udyam Registration” in order to make doing business easier.

vi) No international bids for purchases up to Rs. 200 crores; this will benefit MSME

On June 1, 2020, the Prime Minister opened the “Champions” web portal. This addresses a wide range of e-governance topics, such as MSMEs’ handholding and grievance resolution. As of September 9, 2020, 18,723 grievances had been resolved through the portal. Additionally, the RBI has launched a number of initiatives to lessen MSMEs’ financial stress.