Covid-hit MSMEs shutdown: Nitin Gadkari says no data maintained by government due to this reason

Ease of Doing Business for MSMEs: Even as the country’s micro, small, and medium enterprise (MSME) has been among the sectors hit hardest due to the Covid induced lockdown, which led to the closure or temporary shutdown of businesses, there is no official record maintained for the same by the government. While multiple schemes were announced by the Centre to help Covid-hit MSMEs recover, “however, as MSMEs are there in both formal and informal sector, data regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises (MSME),” MSME Minister Nitin Gadkari said in a written reply to a question in the Rajya Sabha.

Gadkari said that the figures of the real GDP in India during the first quarter of 2020-21 indicated that economic activity contracted due to the strict lockdown measures imposed by the Government and this contraction also had an impact on the MSME sector. In reply to a separate question in the upper house of Parliament on Monday Gadkari cited a study undertaken by Khadi and Village Industries Commission (KVIC) to assess the impact of the pandemic on the micro-units set up under the Prime Minister’s Employment Generation Programme (PMEGP). The minister noted that 88 per cent of the PMEGP beneficiaries reported that they were negatively affected while the remaining 12 per cent were benefitted due to Covid. According to the MSME Ministry’s FY20 report, over 99 per cent (6.30 crore) of 6.33 crore MSMEs are micro-enterprises in India.

Importantly, in September 2020 as well, MSME MoS Pratap Chandra Sarangi in a written reply to a question in the Rajya Sabha had said that “no such record is available” for the number of MSME units shut down during the March-August 2020 period of the pandemic. In fact, there is no data with the government on the number of MSMEs closed down from FY15 to FY20, Sarangi had added.

In a similar instance, the Commerce Ministry had informed in September last year that there is no data on the number of startups as well that had shut operations due to the Covid impact and those which managed to continue. Commerce Minister Piyush Goyal in a written reply to a question in the Rajya Sabha on September 23, 2020, had said that no such data is maintained by the Department for Promotion of Industry and Internal Trade.