Majority MSMEs, others in Pune see pre-Covid recovery in six months or less

India has a base of around 6.33 crore MSMEs out of which 6.30 crore (over 99 per cent) are micro-enterprises, according to the MSME Ministry’s annual report 2020-21. (Representative Image)

A majority businesses including micro, small, and medium enterprises (MSMEs) and others based in Pune are looking to recover back to their pre-Covid production level in not more than six months. According to the 14th round of a post-Covid survey in May of over 150 businesses including 72 per cent MSMEs by the Pune-based Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA), 28 per cent respondents expected to reach their pre-Covid recovery in product levels in over six months. 29 per cent believed to recover in less than three months while for another 24 per cent, the pre-Covid recovery was three-six months away. The remaining 19 per cent were already at the pre-Covid level.

On average, the surveyed companies said that their current level of production has remained almost the same as the survey result showed a marginal increase from 69 per cent in April to 70 per cent in May. The production level had increased from 26 per cent in May last year and peaked at 85 per cent in February before the second Covid wave struck. Likewise, the number of employees at these organisations had increased from 21 per cent in May 2020 to 86 per cent in February and March 2021 before it plummeted to 70 per cent in April and stayed there in May as well. 69 per cent of the organisations surveyed were from the manufacturing sector, 13 per cent from the services sector, and the rest 18 per cent were involved in both manufacturing and services.

Meanwhile, a major chunk of MSMEs and startups across India are staring at uncertainty ahead amid lockdowns in most parts of the country. According to a recent LocalCircles survey involving over 11,000 responses from more than 6,000 Startups and MSMEs located in 171 districts of India, 59 per cent startups and MSMEs are expected to scale down or sell or shut down their operations in the next six months. 41 per cent are out of funds or have less than a month of funds left to survive while only 22 per cent have over three months of runway. Also, 49 per cent are planning to reduce their employee compensation and benefit costs by July to sustain businesses.

India has a base of around 6.33 crore MSMEs out of which 6.30 crore (over 99 per cent) are micro-enterprises, according to the MSME Ministry’s annual report 2020-21. Small enterprises are 3.31 lakh and 0.05 lakh are medium enterprises accounting for 0.52 per cent and 0.01 per cent of total estimated MSMEs, respectively.