Government to compile list of MSMEs that shut down post-Covid

NEW DELHI:  Amidst reports of many smaller businesses shutting shop during the course of the lockdown, the Prime Minister’s Office (PMO) has sought a list of all such businesses from the ministries of Commerce and Micro Small and Medium Enterprises (MSME).

According to sources in the PMO, over the past few days, Prime Minister Narendra Modi and his team had conducted a series of review meetings on the state of the economy with various ministries. The sorry state of the MSME sector and small businessmen was one key issue that was discussed. 

“The government has initiated many steps during the lockdown to support small businesses. However, there are reports of many businesses shutting down. The PMO has asked the concerned ministries to submit details on industries which had to shut operations during lockdown, sector-wise, before September,” a senior PMO official said. 

The Annual Report of the Department of MSMEs (2018-19), there are 6.34 crore MSMEs in the country. Out of this, the industry claims that at least 15 per cent have either shut shop or are in grave danger of shutting down their business.

Since there is no official study on the number of closed units, the PMO has sought a detailed report on this to initiate the next line of action. “For two months, these businesses faced production issues and now, if they face a further three months of lack of demand, they will die,” India’s former chief statistician and renowned economist Pronab Sen said. 

Rs 62K cr disbursed via emergency MSME credit line
Since the lockdown was imposed, the Centre has initiated a credit guarantee scheme worth Rs 3 lakh crore. However, disbursement stood at just Rs 61,987 crore as on July 10 to 1.20 lakh beneficiaries. Under the scheme, the Centre provides 100 per cent backing for a pre-aproved loan sanction of 20 per cent of the borrower’s outstanding amount.